Overfitting
Updated 2026-09-20
Definition
Excessive fitting of a system to past data, so that it works in the test but not in the future.
Why it matters
It comes from too many parameters tweaked until the past "fits". It's reduced with few standard parameters, out-of-sample data and walk-forward.
Practical example
Trying 200 parameter combinations and keeping the best: almost certainly luck.
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Educational content, not financial advice. Trading involves risk.