optimizing rules and variables over an entire data set and obtaining a profitable result does not say anything about how that set of rules will perform on unseen, future data. It's possible - no, it's relatively easy, to optimize a single variable like a trailing stop to turn a trading system that should perform no better than chance, to an awe inspiring, hand rubbing, $ signs in the eyes gold mine. And that's just evil.
First, I'll show you perform this black magic. Then, I'm going to show you how to do it correctly - how to look for the TRUTH - how we do it here at AlgoLab.
Black Magic Recipe:
I built a simple trend line break technical pattern system that has 1 variable which is a following stop. The following stop is optimized using 4 steps from 4...