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CURVE FITTING / OVER-OPTIMISATION

Optimize it so much that the system works only on old data, never on future data.

Published by The Retail Trader · JUL 31, 2026 · Indicators

Curve Fitting / Over-Optimization — Optimizing so much that the system works only on old data, never on future ones. This is the biggest disease of backtesting.

WHERE THIS FITS IN

This term comes under Indicators, in the "SETTINGS and TRAPS" section. The indicator is not wrong, its use is wrong. Here are the words that describe our mistake:

RELATED TERMS TO READ

Other terms in this group — understanding them together is more useful:
• Default Settings
• Optimisation
• Look-Ahead Bias
• Source
• Offset
• Multi-Timeframe Indicator
• Indicator Alert
• Signal Lag
• Indicator Stacking
• Clean Chart

To read the entire group and all its examples in one place, see the journal "INDICATORS: FORMULA TOOLS" - this term has been taken from there.

This entry is for educational purposes only and is not a recommendation to buy or sell. Exchanges change charges, margins, lot sizes and expiry rules from time to time, so verify any figures with your broker or exchange.

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