Strategy validation is a crucial part of live trading.

Get it wrong and the results can be disastrous.

Traders rely on various techniques to validate strategies, including out of sample testing, but how do we know if the approaches we’re using are even valid?

In today’s podcast episode we discuss a series of questions submitted by trader Sam.

Sam raises a number of interesting points about out of sample testing that all traders need to consider, including:

  • How much out of sample data is sufficient to identify a stable relationship,
  • How do you know that what worked in Out of Sample testing will continue to work,
  • Is it even possible to avoid curve-fitting,
  • Why you should NEVER use trading techniques as crutches,
  • Plus much more.

You can listen to it now.

Happy trading,

Tomas and Andrew

“Even a small improvement is an improvement.” - Tomas Nesnidal Click To Tweet “The truth is, we’re always curve fitting. Curve fitting isn’t an evitable thing in trading and it’s not always a bad thing.” - Tomas Nesnidal Click To Tweet “In trading, everything is a statistical probability, not a statistical certainty. So, you need to learn how to live with this uncertainty.” - Tomas Nesnidal Click To Tweet “Your foundation always needs to be super strong and go through the most demanding robustness testing procedures you can imagine.” - Tomas Nesnidal Click To Tweet


Tired of unexpected losses? Find out how to start smashing frustrating false breakouts here.

Do you have any trading questions you’d like answered? Submit them here, and we may cover them in a future episode!

DISCLAIMER: Trading involves significant risk of loss and is not suitable for everyone. People can and do lose money. Hypothetical results have many inherent limitations. Past performance is not necessarily indicative of future results.

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