What is Overfitting?
A modeling error where a trading algorithm is so complex that it "memorizes" historical data rather than learning underlying patterns.
In-Depth Explanation
Practical Example
"The neural network was overfitted to the 2021 bull market and failed to handle the 2022 volatility."
Related Terminology
Curve Fitting
The error of over-optimizing a trading strategy to fit historical data so perfectly that it fails in real-time trading.
Backtesting
The process of testing a trading strategy using historical data to see how it would have performed in the past.
Bull Market
A market condition where prices are rising or expected to rise.
Bear Market
A market condition where prices are falling or expected to fall.
Tradeable Instruments Affected
Tactical How-To Guides
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Learn how to start trading in the UK. A complete step-by-step guide covering regulation, choosing a broker, and placing your first trade safely.
How to Day Trade — Step by Step
Master the art of day trading. Learn how to manage your time, choose instruments, and execute trades within a single day.
How to Keep a Trade Journal
Stop gambling and start trading. Learn the exact process for keeping a professional trading journal that identifies your edge.
Master the language of risk
Knowing the terms is just the start. Learning how to apply them is where the edge is found.
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