Help With Evaulating Intra-Day Trading Systems

I know this is one of those semantical things, but curve-fitting is good. Overfitting is bad.

http://www.dummies.com/programming/...to-use-curve-fitting-in-predictive-analytics/

 

Morning nonlinear5,

Thanks for the advice. I will keep on going and learning as I go. I will not be applying money to any strategy yet. i am low on capital anyway.

 

Just going back to draw down for a minute.
I try for under 10%.
Over 20% is completely unacceptable.

 

The markets tend not to care whether you find your loss "acceptable" or not.

 

True, but that wasn't actually the context of the "acceptability" being discussed, here: the frames of reference mentioned/discussed above were more like "someone assessing his own system with a view to deciding whether to trade it" and "what other individuals would find acceptable".

 

Thanks Humpy,

What do you mean 20%?

20% of what?

Thanks

 

Thanks HobbyTrading for the explanation. Very interesting and good learning:

Just to make sure I understand your comments, I have some questions.

So after I check the curve fit parameters (from testing on 3 year data) on the out of sample (e.g. 7 years) data, and the results are bad, does the mean the curve-fit parameters from 3 year data was over fitted? Just trying to get the terminology correct.

Thanks

 

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Another thing about drawdowns; fine when you are a young turtle. but once you turn 50or even 49, you may not have as much time to recover?? See??,????? Drawdowns to 50 day moving average are fine, juts make sure its not 50%. 5 minute chart is one of the most hated least profitable, but suit yourself. Wisdom is profitable to direct........

 

thank you for the link userque

 

That's exactly correct Xela! Thanks