What is data snooping?Data Snooping
Trying lots of rules or parameters on the same historical data will always turn up a set that looks great by chance, but it's usually just luck.
Learn “data snooping” in an animated lesson
- Indicators in Practice & BacktestingParameter Optimization and Overfitting
Tuning settings to the historical "best" often just memorizes noise. Out-of-sample testing is the real test.
- Indicators in Practice & BacktestingSample Size: Is 7 Wins out of 8 Reliable?
With too few trades, win rate and returns are easily swayed by luck. Use a confidence interval to ask: roughly where is the true win rate?
Related terms
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Go to “Parameter Optimization and Overfitting”