diff --git a/backtesting/src/lib.rs b/backtesting/src/lib.rs
index aaec4919b..3bcae309f 100644
--- a/backtesting/src/lib.rs
+++ b/backtesting/src/lib.rs
@@ -68,6 +68,7 @@ use rust_decimal::Decimal;
 
 pub mod metrics;
 pub mod replay_engine;
+pub mod slippage;
 pub mod strategies;
 pub mod strategy_runner;
 pub mod strategy_tester;
@@ -79,6 +80,10 @@ pub use strategies::{DQNAction, DQNReplayStrategy, PositionState, TradingActionT
 pub use strategy_runner::{
     create_adaptive_strategy_with_config, AdaptiveStrategyConfig, FeatureSettings, RiskSettings,
 };
+pub use slippage::{
+    FixedSlippage, RegimeAwareSlippage, SlippageContext, SlippageModel, SpreadProfile,
+    VolatilityRegime, VolumeImpactSlippage,
+};
 pub use strategy_tester::{
     PerformanceSnapshot, SignalType, Strategy, StrategyConfig, StrategyContext, StrategyResult,
     StrategyTester, TradeRecord, TradingSignal,
diff --git a/backtesting/src/slippage.rs b/backtesting/src/slippage.rs
new file mode 100644
index 000000000..00b9dcfe7
--- /dev/null
+++ b/backtesting/src/slippage.rs
@@ -0,0 +1,287 @@
+//! Dynamic slippage models for realistic trade execution simulation.
+//!
+//! Provides pluggable slippage estimation that accounts for order size,
+//! market liquidity, bid-ask spreads, and volatility regimes.
+
+use serde::{Deserialize, Serialize};
+
+// ---------------------------------------------------------------------------
+// Core types
+// ---------------------------------------------------------------------------
+
+/// Volatility regime classification used to scale slippage estimates.
+#[derive(Debug, Clone, Copy, PartialEq, Eq, Serialize, Deserialize)]
+pub enum VolatilityRegime {
+    /// Calm markets — tighter spreads, lower impact.
+    Low,
+    /// Typical trading conditions.
+    Normal,
+    /// Stressed / crisis markets — wide spreads, high impact.
+    Crisis,
+}
+
+/// Contextual information passed to a [`SlippageModel`] for each fill.
+#[derive(Debug, Clone)]
+pub struct SlippageContext {
+    /// Size of the order being filled (contracts / shares).
+    pub order_size: f64,
+    /// Average daily volume for the instrument.
+    pub average_daily_volume: f64,
+    /// Current bid-ask spread (price units).
+    pub current_spread: f64,
+    /// Current volatility regime.
+    pub volatility_regime: VolatilityRegime,
+}
+
+/// Spread characteristics for a specific instrument.
+#[derive(Debug, Clone)]
+pub struct SpreadProfile {
+    /// Human-readable instrument name.
+    pub name: String,
+    /// Minimum price increment.
+    pub tick_size: f64,
+    /// Typical spread expressed in ticks.
+    pub typical_spread_ticks: f64,
+}
+
+impl SpreadProfile {
+    /// E-mini S&P 500 futures (ES) — tick = 0.25, typical spread = 1 tick.
+    #[must_use]
+    pub fn es_futures() -> Self {
+        Self {
+            name: "ES".to_string(),
+            tick_size: 0.25,
+            typical_spread_ticks: 1.0,
+        }
+    }
+
+    /// 10-Year Treasury Note futures (ZN) — tick = 1/64, typical spread = 1 tick.
+    #[must_use]
+    pub fn zn_futures() -> Self {
+        Self {
+            name: "ZN".to_string(),
+            tick_size: 1.0 / 64.0,
+            typical_spread_ticks: 1.0,
+        }
+    }
+
+    /// USD/CHF (6S / SIXE) futures — tick = 0.0005 (half-pip), typical spread = 2 ticks.
+    #[must_use]
+    pub fn sixe_futures() -> Self {
+        Self {
+            name: "6S".to_string(),
+            tick_size: 0.0005,
+            typical_spread_ticks: 2.0,
+        }
+    }
+
+    /// Typical spread in price units (`tick_size * typical_spread_ticks`).
+    #[must_use]
+    pub fn typical_spread(&self) -> f64 {
+        self.tick_size * self.typical_spread_ticks
+    }
+}
+
+// ---------------------------------------------------------------------------
+// Trait
+// ---------------------------------------------------------------------------
+
+/// A model that estimates execution slippage (in price units) for a given
+/// order context.  Implementations must be `Send + Sync` so they can be
+/// shared across async tasks.
+pub trait SlippageModel: Send + Sync {
+    /// Compute the estimated slippage for the given context.
+    ///
+    /// Returns a non-negative value in price units that should be *added* to
+    /// the execution cost (subtracted from fills on buys, added on sells).
+    fn compute(&self, ctx: &SlippageContext) -> f64;
+}
+
+// ---------------------------------------------------------------------------
+// Implementations
+// ---------------------------------------------------------------------------
+
+/// Returns a constant slippage regardless of context.
+///
+/// This is the simplest model and serves as a backward-compatible default.
+#[derive(Debug, Clone)]
+pub struct FixedSlippage {
+    /// Constant slippage value (price units).
+    pub slippage: f64,
+}
+
+impl FixedSlippage {
+    /// Create a new fixed slippage model.
+    #[must_use]
+    pub fn new(slippage: f64) -> Self {
+        Self { slippage }
+    }
+}
+
+impl SlippageModel for FixedSlippage {
+    fn compute(&self, _ctx: &SlippageContext) -> f64 {
+        self.slippage
+    }
+}
+
+/// Square-root market-impact model: `slippage = k * sqrt(order_size / ADV)`.
+///
+/// This is the standard Almgren-Chriss style temporary impact model used
+/// widely in execution analytics.
+#[derive(Debug, Clone)]
+pub struct VolumeImpactSlippage {
+    /// Impact coefficient (scales the sqrt term).
+    pub k: f64,
+}
+
+impl VolumeImpactSlippage {
+    /// Create a new volume-impact model with the given coefficient.
+    #[must_use]
+    pub fn new(k: f64) -> Self {
+        Self { k }
+    }
+}
+
+impl SlippageModel for VolumeImpactSlippage {
+    fn compute(&self, ctx: &SlippageContext) -> f64 {
+        if ctx.average_daily_volume <= 0.0 {
+            return 0.0;
+        }
+        let participation = ctx.order_size / ctx.average_daily_volume;
+        self.k * participation.sqrt()
+    }
+}
+
+/// Wraps an inner [`SlippageModel`] and multiplies its output by a factor
+/// determined by the current [`VolatilityRegime`].
+///
+/// Regime multipliers:
+/// - `Low`    — 0.5
+/// - `Normal` — 1.0
+/// - `Crisis` — 3.0
+pub struct RegimeAwareSlippage {
+    inner: Box<dyn SlippageModel>,
+    low_factor: f64,
+    normal_factor: f64,
+    crisis_factor: f64,
+}
+
+impl std::fmt::Debug for RegimeAwareSlippage {
+    fn fmt(&self, f: &mut std::fmt::Formatter<'_>) -> std::fmt::Result {
+        f.debug_struct("RegimeAwareSlippage")
+            .field("low_factor", &self.low_factor)
+            .field("normal_factor", &self.normal_factor)
+            .field("crisis_factor", &self.crisis_factor)
+            .finish_non_exhaustive()
+    }
+}
+
+impl RegimeAwareSlippage {
+    /// Wrap `inner` with default regime multipliers (0.5 / 1.0 / 3.0).
+    pub fn new(inner: Box<dyn SlippageModel>) -> Self {
+        Self {
+            inner,
+            low_factor: 0.5,
+            normal_factor: 1.0,
+            crisis_factor: 3.0,
+        }
+    }
+
+    /// Return the multiplier for the given regime.
+    fn regime_factor(&self, regime: VolatilityRegime) -> f64 {
+        match regime {
+            VolatilityRegime::Low => self.low_factor,
+            VolatilityRegime::Normal => self.normal_factor,
+            VolatilityRegime::Crisis => self.crisis_factor,
+        }
+    }
+}
+
+impl SlippageModel for RegimeAwareSlippage {
+    fn compute(&self, ctx: &SlippageContext) -> f64 {
+        let base = self.inner.compute(ctx);
+        base * self.regime_factor(ctx.volatility_regime)
+    }
+}
+
+// ---------------------------------------------------------------------------
+// Tests
+// ---------------------------------------------------------------------------
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+
+    #[test]
+    fn fixed_slippage_returns_constant() {
+        let model = FixedSlippage::new(0.5);
+        let ctx = SlippageContext {
+            order_size: 100.0,
+            average_daily_volume: 1_000_000.0,
+            current_spread: 0.25,
+            volatility_regime: VolatilityRegime::Normal,
+        };
+        let result = model.compute(&ctx);
+        assert!(
+            (result - 0.5).abs() < f64::EPSILON,
+            "Fixed slippage should return the constant value, got {result}"
+        );
+    }
+
+    #[test]
+    fn volume_impact_scales_with_order_size() {
+        let model = VolumeImpactSlippage::new(1.0);
+        let small_ctx = SlippageContext {
+            order_size: 100.0,
+            average_daily_volume: 1_000_000.0,
+            current_spread: 0.25,
+            volatility_regime: VolatilityRegime::Normal,
+        };
+        let large_ctx = SlippageContext {
+            order_size: 10_000.0,
+            average_daily_volume: 1_000_000.0,
+            current_spread: 0.25,
+            volatility_regime: VolatilityRegime::Normal,
+        };
+        let small_slip = model.compute(&small_ctx);
+        let large_slip = model.compute(&large_ctx);
+        assert!(
+            large_slip > small_slip,
+            "Larger orders should produce more slippage: large={large_slip}, small={small_slip}"
+        );
+    }
+
+    #[test]
+    fn regime_aware_crisis_exceeds_normal() {
+        let inner = Box::new(FixedSlippage::new(1.0));
+        let model = RegimeAwareSlippage::new(inner);
+
+        let normal_ctx = SlippageContext {
+            order_size: 100.0,
+            average_daily_volume: 1_000_000.0,
+            current_spread: 0.25,
+            volatility_regime: VolatilityRegime::Normal,
+        };
+        let crisis_ctx = SlippageContext {
+            volatility_regime: VolatilityRegime::Crisis,
+            ..normal_ctx.clone()
+        };
+
+        let normal_slip = model.compute(&normal_ctx);
+        let crisis_slip = model.compute(&crisis_ctx);
+        assert!(
+            crisis_slip > normal_slip,
+            "Crisis slippage ({crisis_slip}) should exceed normal ({normal_slip})"
+        );
+    }
+
+    #[test]
+    fn es_spread_profile_tick_size() {
+        let es = SpreadProfile::es_futures();
+        assert!(
+            (es.tick_size - 0.25).abs() < f64::EPSILON,
+            "ES tick_size should be 0.25, got {}",
+            es.tick_size
+        );
+    }
+}
diff --git a/ml/src/dqn/performance_tests.rs b/ml/src/dqn/performance_tests.rs
index 49f9b7ade..a0e2aee93 100644
--- a/ml/src/dqn/performance_tests.rs
+++ b/ml/src/dqn/performance_tests.rs
@@ -232,18 +232,25 @@ async fn test_rainbow_network_performance() -> Result<(), MLError> {
         let _ = network.forward(&input)?;
     }
 
-    // Measure single inference
-    let start = Instant::now();
-    let _output = network.forward(&input)?;
-    let latency = start.elapsed();
+    // Measure inference (median of 21 runs to avoid flaky single-sample outliers)
+    let mut latencies: Vec<u128> = (0..21)
+        .map(|_| {
+            let start = Instant::now();
+            let _output = network.forward(&input).unwrap();
+            start.elapsed().as_micros()
+        })
+        .collect();
+    latencies.sort();
+    let median_latency = latencies[latencies.len() / 2];
 
-    println!("Single inference latency: {}μs", latency.as_micros());
+    println!("Median inference latency: {}μs (min={}μs, max={}μs)",
+        median_latency, latencies[0], latencies[latencies.len() - 1]);
 
-    // Should be well under 100μs for small networks
+    // Median should be well under 1ms for small networks
     assert!(
-        latency.as_micros() < 1000,
-        "Inference took too long: {}μs",
-        latency.as_micros()
+        median_latency < 1000,
+        "Median inference too slow: {}μs",
+        median_latency
     );
 
     Ok(())
diff --git a/ml/src/validation/degradation.rs b/ml/src/validation/degradation.rs
new file mode 100644
index 000000000..804586866
--- /dev/null
+++ b/ml/src/validation/degradation.rs
@@ -0,0 +1,394 @@
+//! Fold-by-fold performance degradation tracking.
+//!
+//! [`DegradationTracker`] collects per-fold performance metrics and computes a
+//! [`DegradationReport`] with linear regression slope of Sharpe ratios across
+//! folds, p-value, coefficient of variation, recency-weighted Sharpe, and an
+//! estimated half-life.
+
+use serde::{Deserialize, Serialize};
+
+// ---------------------------------------------------------------------------
+// FoldMetrics
+// ---------------------------------------------------------------------------
+
+/// Performance metrics for a single walk-forward fold.
+#[derive(Debug, Clone, Serialize, Deserialize)]
+pub struct FoldMetrics {
+    /// Zero-based fold index.
+    pub fold_index: usize,
+    /// Annualised Sharpe ratio for this fold.
+    pub sharpe: f64,
+    /// Calmar ratio for this fold.
+    pub calmar: f64,
+    /// Win rate (fraction of profitable trades).
+    pub win_rate: f64,
+    /// Maximum drawdown (positive value, e.g. 0.15 = 15%).
+    pub max_drawdown: f64,
+    /// Number of trades executed in this fold.
+    pub trade_count: usize,
+}
+
+// ---------------------------------------------------------------------------
+// DegradationReport
+// ---------------------------------------------------------------------------
+
+/// Summary of performance decay across walk-forward folds.
+#[derive(Debug, Clone, Serialize, Deserialize)]
+pub struct DegradationReport {
+    /// OLS slope of Sharpe vs fold index.  Negative ⇒ decaying performance.
+    pub sharpe_slope: f64,
+    /// Two-tailed p-value for the slope (H0: slope = 0).
+    pub slope_pvalue: f64,
+    /// Coefficient of variation of per-fold Sharpe ratios.
+    pub coefficient_of_variation: f64,
+    /// Exponentially recency-weighted average Sharpe (lambda = 0.3).
+    pub recency_weighted_sharpe: f64,
+    /// Estimated number of folds until Sharpe reaches zero at the current
+    /// decay rate.  `None` if slope >= 0 (no decay) or the last Sharpe <= 0.
+    pub half_life_folds: Option<f64>,
+    /// The raw fold metrics used to compute this report.
+    pub fold_metrics: Vec<FoldMetrics>,
+}
+
+// ---------------------------------------------------------------------------
+// DegradationTracker
+// ---------------------------------------------------------------------------
+
+/// Collects per-fold metrics and computes a degradation report.
+#[derive(Debug, Default)]
+pub struct DegradationTracker {
+    folds: Vec<FoldMetrics>,
+}
+
+impl DegradationTracker {
+    /// Create a new, empty tracker.
+    pub fn new() -> Self {
+        Self { folds: Vec::new() }
+    }
+
+    /// Record metrics for the next fold.
+    pub fn add_fold(&mut self, metrics: FoldMetrics) {
+        self.folds.push(metrics);
+    }
+
+    /// Number of folds recorded so far.
+    pub fn num_folds(&self) -> usize {
+        self.folds.len()
+    }
+
+    /// Compute the degradation report from all recorded folds.
+    ///
+    /// Requires at least 2 folds.  With fewer, slopes and p-values are set
+    /// to 0.0 / 1.0 respectively.
+    pub fn compute(&self) -> DegradationReport {
+        let n = self.folds.len();
+        let sharpes: Vec<f64> = self.folds.iter().map(|f| f.sharpe).collect();
+
+        if n < 2 {
+            return DegradationReport {
+                sharpe_slope: 0.0,
+                slope_pvalue: 1.0,
+                coefficient_of_variation: 0.0,
+                recency_weighted_sharpe: sharpes.first().copied().unwrap_or(0.0),
+                half_life_folds: None,
+                fold_metrics: self.folds.clone(),
+            };
+        }
+
+        // --- Linear regression: y = sharpe, x = fold_index ---
+        let (slope, intercept) = linear_regression(&sharpes);
+
+        // --- P-value via t-test ---
+        let slope_pvalue = slope_p_value(&sharpes, slope, intercept);
+
+        // --- Coefficient of variation ---
+        let coefficient_of_variation = coeff_of_variation(&sharpes);
+
+        // --- Recency-weighted Sharpe (exponential decay, lambda = 0.3) ---
+        let recency_weighted_sharpe = recency_weighted_mean(&sharpes, 0.3);
+
+        // --- Half-life estimate ---
+        let half_life_folds = if slope < 0.0 {
+            // Extrapolate from last fold: how many more folds until Sharpe = 0?
+            let last_sharpe = sharpes.last().copied().unwrap_or(0.0);
+            if last_sharpe > 0.0 {
+                Some(last_sharpe / (-slope))
+            } else {
+                None
+            }
+        } else {
+            None
+        };
+
+        DegradationReport {
+            sharpe_slope: slope,
+            slope_pvalue,
+            coefficient_of_variation,
+            recency_weighted_sharpe,
+            half_life_folds,
+            fold_metrics: self.folds.clone(),
+        }
+    }
+}
+
+// ---------------------------------------------------------------------------
+// Statistical helpers
+// ---------------------------------------------------------------------------
+
+/// Ordinary least-squares linear regression of `ys` against `x = 0, 1, 2, ...`.
+///
+/// Returns `(slope, intercept)`.
+fn linear_regression(ys: &[f64]) -> (f64, f64) {
+    let n = ys.len() as f64;
+    if n < 2.0 {
+        return (0.0, ys.first().copied().unwrap_or(0.0));
+    }
+
+    let x_mean = (n - 1.0) / 2.0;
+    let y_mean = ys.iter().sum::<f64>() / n;
+
+    let mut numerator = 0.0_f64;
+    let mut denominator = 0.0_f64;
+
+    for (i, y) in ys.iter().enumerate() {
+        let x = i as f64;
+        numerator += (x - x_mean) * (y - y_mean);
+        denominator += (x - x_mean) * (x - x_mean);
+    }
+
+    if denominator.abs() < 1e-30 {
+        return (0.0, y_mean);
+    }
+
+    let slope = numerator / denominator;
+    let intercept = y_mean - slope * x_mean;
+    (slope, intercept)
+}
+
+/// Two-tailed p-value for the regression slope via a t-test.
+///
+/// Uses the Abramowitz & Stegun rational approximation for the normal CDF
+/// when degrees of freedom >= 30, and a simple t-to-normal approximation
+/// for smaller samples.
+fn slope_p_value(ys: &[f64], slope: f64, intercept: f64) -> f64 {
+    let n = ys.len();
+    if n < 3 {
+        return 1.0;
+    }
+
+    let n_f = n as f64;
+    let df = n_f - 2.0;
+
+    // Residual sum of squares
+    let rss: f64 = ys
+        .iter()
+        .enumerate()
+        .map(|(i, &y)| {
+            let predicted = intercept + slope * (i as f64);
+            (y - predicted).powi(2)
+        })
+        .sum();
+
+    let mse = rss / df;
+    if mse < 1e-30 {
+        // Perfect fit → slope is exactly determined
+        if slope.abs() < 1e-30 {
+            return 1.0;
+        }
+        return 0.0;
+    }
+
+    // Sum of squared deviations of x from its mean
+    let x_mean = (n_f - 1.0) / 2.0;
+    let ss_x: f64 = (0..n).map(|i| (i as f64 - x_mean).powi(2)).sum();
+
+    if ss_x < 1e-30 {
+        return 1.0;
+    }
+
+    let se_slope = (mse / ss_x).sqrt();
+    let t_stat = slope / se_slope;
+
+    // Convert t-statistic to p-value using normal approximation
+    // (adequate for our use case; exact t-distribution needs more machinery)
+    let p = 2.0 * (1.0 - normal_cdf_approx(t_stat.abs()));
+    p.clamp(0.0, 1.0)
+}
+
+/// Abramowitz & Stegun approximation to the standard normal CDF.
+///
+/// Maximum error < 7.5e-8.  Formula 26.2.17 from Handbook of Mathematical
+/// Functions.
+fn normal_cdf_approx(x: f64) -> f64 {
+    if x < -8.0 {
+        return 0.0;
+    }
+    if x > 8.0 {
+        return 1.0;
+    }
+
+    let a1 = 0.254829592_f64;
+    let a2 = -0.284496736_f64;
+    let a3 = 1.421413741_f64;
+    let a4 = -1.453152027_f64;
+    let a5 = 1.061405429_f64;
+    let p = 0.3275911_f64;
+
+    let sign = if x >= 0.0 { 1.0 } else { -1.0 };
+    let abs_x = x.abs();
+    let t = 1.0 / (1.0 + p * abs_x);
+    let y = 1.0 - (((((a5 * t + a4) * t) + a3) * t + a2) * t + a1) * t * (-abs_x * abs_x / 2.0).exp();
+
+    0.5 * (1.0 + sign * y)
+}
+
+/// Coefficient of variation (std / |mean|).
+fn coeff_of_variation(values: &[f64]) -> f64 {
+    let n = values.len() as f64;
+    if n < 1.0 {
+        return 0.0;
+    }
+
+    let mean = values.iter().sum::<f64>() / n;
+    if mean.abs() < 1e-30 {
+        return 0.0;
+    }
+
+    let variance = values.iter().map(|v| (v - mean).powi(2)).sum::<f64>() / n;
+    variance.sqrt() / mean.abs()
+}
+
+/// Exponentially recency-weighted mean.
+///
+/// Weight for fold `i` (0-indexed) is `exp(lambda * i)`, so later folds
+/// receive higher weight.
+fn recency_weighted_mean(values: &[f64], lambda: f64) -> f64 {
+    if values.is_empty() {
+        return 0.0;
+    }
+
+    let mut weight_sum = 0.0_f64;
+    let mut weighted_sum = 0.0_f64;
+
+    for (i, &v) in values.iter().enumerate() {
+        let w = (lambda * i as f64).exp();
+        weighted_sum += w * v;
+        weight_sum += w;
+    }
+
+    if weight_sum.abs() < 1e-30 {
+        return 0.0;
+    }
+
+    weighted_sum / weight_sum
+}
+
+// ---------------------------------------------------------------------------
+// Tests
+// ---------------------------------------------------------------------------
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+
+    /// Helper: create a tracker with linearly declining Sharpe ratios.
+    fn make_declining_tracker(n: usize, start: f64, slope: f64) -> DegradationTracker {
+        let mut tracker = DegradationTracker::new();
+        for i in 0..n {
+            tracker.add_fold(FoldMetrics {
+                fold_index: i,
+                sharpe: start + slope * i as f64,
+                calmar: 1.0,
+                win_rate: 0.55,
+                max_drawdown: 0.10,
+                trade_count: 100,
+            });
+        }
+        tracker
+    }
+
+    #[test]
+    fn test_negative_slope_for_declining_sharpe() {
+        let tracker = make_declining_tracker(10, 2.0, -0.15);
+        let report = tracker.compute();
+
+        assert!(
+            report.sharpe_slope < 0.0,
+            "Expected negative slope, got {}",
+            report.sharpe_slope,
+        );
+        // The slope should be approximately -0.15
+        assert!(
+            (report.sharpe_slope - (-0.15)).abs() < 1e-10,
+            "Expected slope ~-0.15, got {}",
+            report.sharpe_slope,
+        );
+    }
+
+    #[test]
+    fn test_pvalue_significant_for_strong_trend() {
+        let tracker = make_declining_tracker(20, 2.0, -0.1);
+        let report = tracker.compute();
+
+        // With a perfectly linear decline across 20 folds, p-value should be
+        // essentially 0 (the fit is exact).
+        assert!(
+            report.slope_pvalue < 0.05,
+            "Expected p-value < 0.05, got {}",
+            report.slope_pvalue,
+        );
+    }
+
+    #[test]
+    fn test_half_life_estimated_correctly() {
+        // Start=2.0, slope=-0.2/fold → after 10 folds, Sharpe=0.0
+        // Last Sharpe at fold 9: 2.0 + (-0.2)*9 = 0.2
+        // Half-life = 0.2 / 0.2 = 1.0 folds remaining
+        let tracker = make_declining_tracker(10, 2.0, -0.2);
+        let report = tracker.compute();
+
+        assert!(report.half_life_folds.is_some());
+        let hl = report.half_life_folds.unwrap_or(f64::NAN);
+        assert!(
+            (hl - 1.0).abs() < 1e-10,
+            "Expected half_life ~1.0, got {}",
+            hl,
+        );
+    }
+
+    #[test]
+    fn test_recency_weighting_favours_later_folds() {
+        // Two folds: fold 0 has Sharpe=0.0, fold 1 has Sharpe=2.0
+        // Recency weighting (lambda=0.3) should produce a weighted mean > 1.0
+        let mut tracker = DegradationTracker::new();
+        tracker.add_fold(FoldMetrics {
+            fold_index: 0,
+            sharpe: 0.0,
+            calmar: 0.5,
+            win_rate: 0.45,
+            max_drawdown: 0.20,
+            trade_count: 50,
+        });
+        tracker.add_fold(FoldMetrics {
+            fold_index: 1,
+            sharpe: 2.0,
+            calmar: 1.5,
+            win_rate: 0.60,
+            max_drawdown: 0.08,
+            trade_count: 80,
+        });
+
+        let report = tracker.compute();
+        assert!(
+            report.recency_weighted_sharpe > 1.0,
+            "Expected recency-weighted Sharpe > 1.0, got {}",
+            report.recency_weighted_sharpe,
+        );
+        // Simple mean would be 1.0; recency weighting should push above 1.0
+        assert!(
+            report.recency_weighted_sharpe < 2.0,
+            "Expected recency-weighted Sharpe < 2.0, got {}",
+            report.recency_weighted_sharpe,
+        );
+    }
+}
diff --git a/ml/src/validation/harness.rs b/ml/src/validation/harness.rs
index 883772b1f..67ffbbfed 100644
--- a/ml/src/validation/harness.rs
+++ b/ml/src/validation/harness.rs
@@ -15,7 +15,7 @@ use crate::MLError;
 use super::{
     deflated_sharpe_ratio, excess_kurtosis, per_regime_breakdown, permutation_test,
     probability_of_backtest_overfitting, sharpe_ratio, skewness, walk_forward_split,
-    DsrResult, PboResult, PermutationResult, RegimeMetrics, TimeSeriesData,
+    DegradationReport, DsrResult, PboResult, PermutationResult, RegimeMetrics, TimeSeriesData,
     ValidatableStrategy, WalkForwardConfig,
 };
 
@@ -74,6 +74,9 @@ pub struct ValidationReport {
     pub per_regime_metrics: HashMap<RegimeType, RegimeMetrics>,
     /// Overall verdict.
     pub verdict: ValidationVerdict,
+    /// Optional degradation report (fold-by-fold performance decay analysis).
+    #[serde(skip_serializing_if = "Option::is_none")]
+    pub degradation: Option<DegradationReport>,
 }
 
 // ---------------------------------------------------------------------------
@@ -245,6 +248,7 @@ impl ValidationHarness {
             permutation,
             per_regime_metrics,
             verdict,
+            degradation: None,
         })
     }
 }
diff --git a/ml/src/validation/mod.rs b/ml/src/validation/mod.rs
index 8344ade45..0f0e2dc5a 100644
--- a/ml/src/validation/mod.rs
+++ b/ml/src/validation/mod.rs
@@ -5,11 +5,13 @@
 //! - Statistical validation (walk-forward, DSR, PBO, permutation tests)
 
 pub mod adapters;
+pub mod degradation;
 pub mod financial;
 pub mod harness;
 pub mod ppo_adapter;
 pub mod regime_analysis;
 pub mod statistical;
+pub mod temporal_guard;
 pub mod types;
 pub mod walk_forward;
 
@@ -43,3 +45,9 @@ pub use statistical::{
     probability_of_backtest_overfitting, sharpe_ratio, skewness, DsrResult, PboResult,
     PermutationResult,
 };
+
+// Re-export temporal guard types
+pub use temporal_guard::{LeakageAuditReport, NormalizationStats, TemporalGuard};
+
+// Re-export degradation tracking types
+pub use degradation::{DegradationReport, DegradationTracker, FoldMetrics};
diff --git a/ml/src/validation/temporal_guard.rs b/ml/src/validation/temporal_guard.rs
new file mode 100644
index 000000000..c8c40983d
--- /dev/null
+++ b/ml/src/validation/temporal_guard.rs
@@ -0,0 +1,403 @@
+//! Temporal guard for preventing forward-looking data leakage.
+//!
+//! Wraps a [`TimeSeriesData`] reference with a cutoff index that partitions
+//! the series into a training region `[0, cutoff)` and a test region
+//! `[cutoff, len)`.  Any attempt to slice across the boundary is rejected,
+//! ensuring that training code never accidentally sees future data.
+
+use chrono::{DateTime, Utc};
+
+use super::TimeSeriesData;
+use crate::MLError;
+
+// ---------------------------------------------------------------------------
+// LeakageAuditReport
+// ---------------------------------------------------------------------------
+
+/// Result of a forward-leakage audit on a [`TemporalGuard`].
+#[derive(Debug, Clone)]
+pub struct LeakageAuditReport {
+    /// `true` if any training timestamp is >= any test timestamp.
+    pub has_future_timestamps: bool,
+    /// Number of bars in the training partition.
+    pub training_bars: usize,
+    /// The timestamp at the cutoff index, if available.
+    pub cutoff_timestamp: Option<DateTime<Utc>>,
+}
+
+// ---------------------------------------------------------------------------
+// NormalizationStats
+// ---------------------------------------------------------------------------
+
+/// Feature-wise normalization statistics computed from training data only.
+#[derive(Debug, Clone)]
+pub struct NormalizationStats {
+    /// Per-feature means.
+    pub means: Vec<f64>,
+    /// Per-feature standard deviations.
+    pub stds: Vec<f64>,
+    /// Number of samples (bars) used.
+    pub sample_count: usize,
+}
+
+// ---------------------------------------------------------------------------
+// TemporalGuard
+// ---------------------------------------------------------------------------
+
+/// Prevents forward-looking data leakage by enforcing a temporal cutoff.
+///
+/// The guard partitions the underlying [`TimeSeriesData`] into:
+/// - **Training region**: `[0, cutoff_idx)`
+/// - **Test region**: `[cutoff_idx, data.len())`
+///
+/// Slicing across the boundary is an error.
+#[derive(Debug)]
+pub struct TemporalGuard<'a> {
+    data: &'a TimeSeriesData,
+    cutoff_idx: usize,
+}
+
+impl<'a> TemporalGuard<'a> {
+    /// Create a new `TemporalGuard`.
+    ///
+    /// # Errors
+    ///
+    /// Returns [`MLError::InvalidInput`] if `cutoff_idx` is 0, less than 2
+    /// (training needs at least 2 bars), or exceeds `data.len()`.
+    pub fn new(data: &'a TimeSeriesData, cutoff_idx: usize) -> Result<Self, MLError> {
+        if cutoff_idx < 2 {
+            return Err(MLError::InvalidInput(format!(
+                "TemporalGuard cutoff must be >= 2 for valid training slice, got {}",
+                cutoff_idx,
+            )));
+        }
+        if cutoff_idx > data.len() {
+            return Err(MLError::InvalidInput(format!(
+                "TemporalGuard cutoff ({}) exceeds data length ({})",
+                cutoff_idx,
+                data.len(),
+            )));
+        }
+        Ok(Self { data, cutoff_idx })
+    }
+
+    /// Return the training partition `[0, cutoff)` as a new `TimeSeriesData`.
+    ///
+    /// # Errors
+    ///
+    /// Propagates errors from [`TimeSeriesData::slice`].
+    pub fn training_slice(&self) -> Result<TimeSeriesData, MLError> {
+        self.data.slice(0, self.cutoff_idx)
+    }
+
+    /// Return a test sub-range `[start, end)`.
+    ///
+    /// Both `start` and `end` must be at or after the cutoff index.
+    ///
+    /// # Errors
+    ///
+    /// Returns [`MLError::InvalidInput`] if `start < cutoff_idx`, or
+    /// propagates errors from [`TimeSeriesData::slice`].
+    pub fn test_slice(&self, start: usize, end: usize) -> Result<TimeSeriesData, MLError> {
+        if start < self.cutoff_idx {
+            return Err(MLError::InvalidInput(format!(
+                "test_slice start ({}) is before cutoff ({}); this would leak training data",
+                start, self.cutoff_idx,
+            )));
+        }
+        self.data.slice(start, end)
+    }
+
+    /// Slice the data within a single partition.
+    ///
+    /// The range `[start, end)` must lie entirely within `[0, cutoff)` or
+    /// entirely within `[cutoff, len)`.  Crossing the boundary is an error.
+    ///
+    /// # Errors
+    ///
+    /// Returns [`MLError::InvalidInput`] if the range crosses the cutoff
+    /// boundary, or propagates errors from [`TimeSeriesData::slice`].
+    pub fn slice(&self, start: usize, end: usize) -> Result<TimeSeriesData, MLError> {
+        if start >= end {
+            return Err(MLError::InvalidInput(format!(
+                "Invalid slice range: start ({}) must be less than end ({})",
+                start, end,
+            )));
+        }
+        // Entirely in training region
+        let in_train = end <= self.cutoff_idx;
+        // Entirely in test region
+        let in_test = start >= self.cutoff_idx;
+
+        if !in_train && !in_test {
+            return Err(MLError::InvalidInput(format!(
+                "Slice [{}, {}) crosses the temporal cutoff at index {}; \
+                 this would leak future data into the training partition",
+                start, end, self.cutoff_idx,
+            )));
+        }
+        self.data.slice(start, end)
+    }
+
+    /// Audit for timestamp-based forward leakage.
+    ///
+    /// Checks whether any training timestamp is >= the earliest test
+    /// timestamp, which would indicate temporal ordering issues.
+    pub fn audit_leakage(&self) -> LeakageAuditReport {
+        let cutoff_timestamp = self.data.timestamps.get(self.cutoff_idx).copied();
+
+        let has_future_timestamps = if self.cutoff_idx < self.data.len() {
+            // Find the minimum test timestamp
+            let min_test_ts = self
+                .data
+                .timestamps
+                .get(self.cutoff_idx..)
+                .unwrap_or_default()
+                .iter()
+                .min()
+                .copied();
+
+            // Find the maximum training timestamp
+            let max_train_ts = self
+                .data
+                .timestamps
+                .get(..self.cutoff_idx)
+                .unwrap_or_default()
+                .iter()
+                .max()
+                .copied();
+
+            match (max_train_ts, min_test_ts) {
+                (Some(train_max), Some(test_min)) => train_max >= test_min,
+                _ => false,
+            }
+        } else {
+            false
+        };
+
+        LeakageAuditReport {
+            has_future_timestamps,
+            training_bars: self.cutoff_idx,
+            cutoff_timestamp,
+        }
+    }
+
+    /// Compute per-feature normalization statistics from training data only.
+    ///
+    /// Returns means and standard deviations for each feature dimension,
+    /// computed exclusively from `[0, cutoff)`.  These can then be applied
+    /// to the test partition without leaking future information.
+    pub fn compute_normalization_stats(&self) -> NormalizationStats {
+        let train_features = self
+            .data
+            .features
+            .get(..self.cutoff_idx)
+            .unwrap_or_default();
+
+        let sample_count = train_features.len();
+        if sample_count == 0 {
+            return NormalizationStats {
+                means: Vec::new(),
+                stds: Vec::new(),
+                sample_count: 0,
+            };
+        }
+
+        // Determine feature dimension from first row
+        let dim = train_features
+            .first()
+            .map(|r| r.len())
+            .unwrap_or_default();
+
+        let mut means = vec![0.0_f64; dim];
+        let mut sq_sums = vec![0.0_f64; dim];
+
+        for row in train_features {
+            for (j, val) in row.iter().enumerate() {
+                if let Some(m) = means.get_mut(j) {
+                    *m += *val as f64;
+                }
+                if let Some(s) = sq_sums.get_mut(j) {
+                    *s += (*val as f64) * (*val as f64);
+                }
+            }
+        }
+
+        let n = sample_count as f64;
+        for m in &mut means {
+            *m /= n;
+        }
+
+        let stds: Vec<f64> = means
+            .iter()
+            .zip(sq_sums.iter())
+            .map(|(&mean, &sq_sum)| {
+                let variance = (sq_sum / n) - mean * mean;
+                if variance > 0.0 {
+                    variance.sqrt()
+                } else {
+                    0.0
+                }
+            })
+            .collect();
+
+        NormalizationStats {
+            means,
+            stds,
+            sample_count,
+        }
+    }
+}
+
+// ---------------------------------------------------------------------------
+// Tests
+// ---------------------------------------------------------------------------
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+    use chrono::TimeZone;
+
+    /// Helper: create N UTC timestamps starting from 2024-01-01.
+    fn make_timestamps(n: usize) -> Vec<DateTime<Utc>> {
+        (0..n)
+            .map(|i| {
+                Utc.with_ymd_and_hms(2024, 1, 1, 0, 0, 0)
+                    .single()
+                    .unwrap_or_else(Utc::now)
+                    + chrono::Duration::days(i as i64)
+            })
+            .collect()
+    }
+
+    /// Helper: create N feature rows with a deterministic pattern.
+    fn make_features(n: usize, dim: usize) -> Vec<Vec<f32>> {
+        (0..n)
+            .map(|i| (0..dim).map(|j| (i * dim + j) as f32).collect())
+            .collect()
+    }
+
+    /// Helper: create a simple ascending-price time series.
+    fn make_test_data(n: usize) -> TimeSeriesData {
+        let prices: Vec<f64> = (0..n).map(|i| 100.0 + i as f64).collect();
+        TimeSeriesData::new(make_timestamps(n), make_features(n, 3), prices)
+            .unwrap_or_else(|e| {
+                // We cannot panic due to clippy deny, but this is test code.
+                // Use a fallback that will never actually be reached.
+                eprintln!("Test data creation failed: {e}");
+                // Return minimal valid data
+                TimeSeriesData::new(
+                    make_timestamps(2),
+                    make_features(2, 3),
+                    vec![100.0, 101.0],
+                )
+                .unwrap_or_else(|_| std::process::exit(1))
+            })
+    }
+
+    #[test]
+    fn test_training_slice_returns_correct_range() {
+        let data = make_test_data(10);
+        let guard =
+            TemporalGuard::new(&data, 5).unwrap_or_else(|e| {
+                eprintln!("Guard creation failed: {e}");
+                std::process::exit(1)
+            });
+        let train = guard.training_slice().unwrap_or_else(|e| {
+            eprintln!("training_slice failed: {e}");
+            std::process::exit(1)
+        });
+
+        assert_eq!(train.len(), 5);
+        // First price should be 100.0, last should be 104.0
+        let first = train.prices.first().copied().unwrap_or(0.0);
+        let last = train.prices.last().copied().unwrap_or(0.0);
+        assert!((first - 100.0).abs() < 1e-12);
+        assert!((last - 104.0).abs() < 1e-12);
+    }
+
+    #[test]
+    fn test_test_slice_rejects_before_cutoff() {
+        let data = make_test_data(10);
+        let guard =
+            TemporalGuard::new(&data, 5).unwrap_or_else(|e| {
+                eprintln!("Guard creation failed: {e}");
+                std::process::exit(1)
+            });
+
+        // start=3 is before cutoff=5 → should fail
+        let result = guard.test_slice(3, 8);
+        assert!(result.is_err());
+        let err_msg = format!("{}", result.unwrap_err());
+        assert!(
+            err_msg.contains("leak"),
+            "Expected 'leak' in error, got: {err_msg}",
+        );
+    }
+
+    #[test]
+    fn test_slice_rejects_cross_boundary() {
+        let data = make_test_data(10);
+        let guard =
+            TemporalGuard::new(&data, 5).unwrap_or_else(|e| {
+                eprintln!("Guard creation failed: {e}");
+                std::process::exit(1)
+            });
+
+        // [3, 7) crosses cutoff=5
+        let result = guard.slice(3, 7);
+        assert!(result.is_err());
+        let err_msg = format!("{}", result.unwrap_err());
+        assert!(
+            err_msg.contains("crosses"),
+            "Expected 'crosses' in error, got: {err_msg}",
+        );
+
+        // [0, 4) is entirely in training → should succeed
+        let train_ok = guard.slice(0, 4);
+        assert!(train_ok.is_ok());
+
+        // [5, 8) is entirely in test → should succeed
+        let test_ok = guard.slice(5, 8);
+        assert!(test_ok.is_ok());
+    }
+
+    #[test]
+    fn test_audit_detects_no_leakage_in_sorted_data() {
+        let data = make_test_data(10);
+        let guard =
+            TemporalGuard::new(&data, 5).unwrap_or_else(|e| {
+                eprintln!("Guard creation failed: {e}");
+                std::process::exit(1)
+            });
+
+        let report = guard.audit_leakage();
+        assert!(!report.has_future_timestamps);
+        assert_eq!(report.training_bars, 5);
+        assert!(report.cutoff_timestamp.is_some());
+    }
+
+    #[test]
+    fn test_normalization_stats_from_training_only() {
+        let data = make_test_data(10);
+        let guard =
+            TemporalGuard::new(&data, 5).unwrap_or_else(|e| {
+                eprintln!("Guard creation failed: {e}");
+                std::process::exit(1)
+            });
+
+        let stats = guard.compute_normalization_stats();
+        assert_eq!(stats.sample_count, 5);
+        assert_eq!(stats.means.len(), 3);
+        assert_eq!(stats.stds.len(), 3);
+
+        // Verify means are computed from training features only (rows 0..5)
+        // Feature column 0: values 0, 3, 6, 9, 12 → mean = 6.0
+        let expected_mean_0 = (0.0 + 3.0 + 6.0 + 9.0 + 12.0) / 5.0;
+        let got_mean_0 = stats.means.first().copied().unwrap_or(f64::NAN);
+        assert!(
+            (got_mean_0 - expected_mean_0).abs() < 1e-10,
+            "Expected mean_0={expected_mean_0}, got {got_mean_0}",
+        );
+    }
+}