I test strategies by guessing, say, the optimum values for the RSI. As an example, I look at three stock's 10-year data, and I see what parameters might work for those three stocks best. Then I apply the same method to, say, a 100 stocks. If my results are good, I keep the strategy, otherwise I disregard it. How do I know if I am over-fitting? Secondly, a yearly return of 50 percent in the last ten years for the stocks in my list...is it good enough? OR, back tests are usually better?