Execution Failure
Execution failure occurs when the idea may have merit, but live implementation differs from the tested process. Slippage, fill quality, latency, incomplete fills, and order handling can all affect results.
Structural Failure
Structural failure occurs earlier. It happens when the measured condition itself is unstable, subjective, or dependent on arbitrary presentation choices.
Why the Distinction Matters
A strategy can fail because it was badly executed. It can also fail because the underlying pattern or signal was never structurally valid. Those are different problems and require different reviews.
Execution review asks: did we implement the rule correctly?
Structural review asks: was the rule built on something measurable in the first place?
Structural review asks: was the rule built on something measurable in the first place?
The Better Sequence
First define structure. Then test outcomes. Then design execution logic. Then validate implementation. Reversing that order often leads traders to optimize execution around weak assumptions.