EA development specialists explain clearly and politely! A beginner's automated trading course from zero — Episode 12: Run EAs with a long-term perspective [FX Noble/Nobility]
FX Nobleman's Profile
Transitioned from discretionary trading to automated trading, and since 2017 has been offering EA development on GoGoJungle. Boasting over 1,000 sales including the flagship work “Scalping Dragon,” and continues to publish various information about automated trading on blogs and Twitter.
Official Blog:FX Nobleman's EA Development Blog
Twitter:https://twitter.com/yenpetit
*This article is a reprint/re-edition of an article from FX攻略.com December 2019 issue. Please note that the market information written in the main text may differ from the current market.
What is Overfitting?
When talking about automated trading with EAs, one unavoidable topic is “overfitting.” Overfitting means excessively tailoring the EA’s logic and parameters to past price movements.
An EA created through overfitting may show excellent performance in backtests, but because it is specialized for past movements, its predictive performance for the future is poor, and its actual operation often deteriorates. You may have seen EAs that perform superbly in backtests but fail to win in forward tests (live operation).
In this article, we will teach you the key points to determine whether commercially available EAs are overfitted.
