event-driven vs vectorized

Two backtest architectures: a vectorized engine computes signals across the whole series with array operations (fast, but prone to assuming free, instant, perfect fills), while an event-driven engine steps bar by bar maintaining live order and fill state. The event-driven approach is the honest place to measure because costs and look-ahead are handled where they actually happen; the vectorized approach’s speed makes it an overfitting accelerant.

First used in Lesson 2.4 · Event-driven backtesting with honest costs — the lesson that makes this term real.