What is overfitting when optimising an EA?
I optimised my EA and the back test looks perfect, but it loses on a demo account. Why?
For education only. This is not financial advice. Trading carries a high risk of loss.
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1 Answer
Best answer
Overfitting (curve fitting) happens when you tune the settings until the EA looks perfect on past data. It then fits the noise of that period instead of a real edge, and it fails on new data.
How to reduce it:
- Use fewer parameters.
- Test on out-of-sample data and use walk-forward testing.
- Prefer settings in a stable zone, where nearby values also give good results, over one sharp peak.
- Test on different pairs and periods.
- Include realistic spread and slippage.
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