Backtesting Stock Universes

Why you should be testing vs all stocks

Should you backtest your trading systems on the entire market or just subsets like the S&P 500 or Russell 3000?

In this episode, Dave and I dig into the pros and cons of filtering your stock universe. We debate whether market cap filters and inclusion in major indices help your edge—or just add noise.

🔹 Why survivorship bias ruins backtests
🔹 When filtering adds protection (not prediction)
🔹 Why day traders should go wide, investors should go filtered
🔹 And yes—why you never cherry-pick your test list (looking at you, NVDA-only traders)

👉 Whether you're trading for the day or the long haul, your universe matters. But the key takeaway? Test it both ways. If your setup only works on S&P names, you’ve got more questions to answer. www.statsedgetrading.com