during my search for a profitable system I've repeatedly met with a strange phenomenon - a system optimised for a particular period more often than not don't work for the present. I've encountered this often enough to the point that I no longer trust any optimised results of a system. yet I still don't understand why this would happen. how could a working system, when optimised, stop working right away?
when we are given a system, we build our confidence by backtesting it, we want to see how it has worked in the past. we decide whether or not to trade it based on its past performance. optimization gives us the best track record of the system. this performance record, if we were not told that it was optimised, is no different than any other track record to us. yet if we believed in what we saw, it could lead us to financial ruin. what's so wrong with optimisation that made it do this?
no matter how much we optimse a system, it is still based on historical data. and if we could go back in time with this optimised system, we would almost certain make the fantastic profits shown by the system. yet if we trade it in the now and future, last year's 200% profitable system could easily wipe out your account. how could this happen?
when we are given a system, we build our confidence by backtesting it, we want to see how it has worked in the past. we decide whether or not to trade it based on its past performance. optimization gives us the best track record of the system. this performance record, if we were not told that it was optimised, is no different than any other track record to us. yet if we believed in what we saw, it could lead us to financial ruin. what's so wrong with optimisation that made it do this?
no matter how much we optimse a system, it is still based on historical data. and if we could go back in time with this optimised system, we would almost certain make the fantastic profits shown by the system. yet if we trade it in the now and future, last year's 200% profitable system could easily wipe out your account. how could this happen?