"Understand your own buying and selling strategy well. Past verification is minimal." (From "The Psychology of Magicians")
This is advice from the author who trained many traders (Van K. Sarp).
“I want to optimize the system. The more I tweak the data to fit past conditions, the more it feels like I understand buying and selling. Rather than that, what matters is understanding my own trading policy well. Past verification should be minimal.”
A viewpoint that outright denies excessive past verification!!!
It’s refreshing to read (laughs).
With automated trading (EA), there is a problem called curve fitting, isn’t there?
The wording doesn’t feel quite appropriate…
Over-optimization (overfitting) feels more fitting.
Create an EA with many parameters.
Mess around with the parameters to find the neatest rising-right trend.
And then actually start real-time operation.
Not winning at all....
Is it like this?
Speaking for myself as well...
So far, I have fallen into this trap more than anyone else...
Why does this happen?
I thought about it. And I realized something.
Was I a follower of the Backtest Truth Church???
Backtest results must be a clean, upward-sloping line (like Ishiba-san),
was maybe my own assumption?
An EA that continues to rise forever might not exist in this world.
Maybe I was just chasing something that didn’t exist.
I thought it looked cool to have a nice asset curve when listing it for sale,
or “I’m amazing” because I achieved such good results in 10 years of backtesting?
I think there’s a strange urge to present myself well mixed in as well.
In the first place, those who purchase EA
probably do not trust backtest results at all, do they??? (laughs)
“Understanding your own trading policy well”—there should be a hint in the author’s words.
I think I’ll approach EA development with a different approach from now on.
I will leave the Backtest Truth Church (laughs).
See you next time.
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https://www.gogojungle.co.jp/systemtrade/fx/32763Also sharing my own real-time operation for reference.
Also sharing my own real-time operation for reference.
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