Traders' Roundtable

Using ETFs will mitigate this problem somewhat, but they do still change composition from time-time due to corporate actions (mergers, acquisitions, breakups, spin-offs etc.) and companies going bankrupt.

I think this is perfectly acceptable though. Although the components of an ETF have changed ...

I completely agree in terms of the consistency of the environment.

You can create a somewhat static environment by filtering the market to return a group of individual equities, but then you run into the problem of being able to acquire the data to backtest according to your filter if the filter ...

As someone more comfortable trading stocks I'm finding it very difficult to accurately backtest any further than 3 years. I realize I have much more than 3 years of data at my disposal but then doesn't it really come down to stock selection rather than the system.

Let's say my system is designed to ...