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Trading Nut | Trader Interviews - Forex, Futures, Stocks (Robots & More)

236: In 10 Years, Will Your “Mechanical Trading Strategy” Still Work? Pro Trader, Kevin Davey, Explains

Jul 19, 2023
01:11:53

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Podcast summary created with Snipd AI

Quick takeaways

  • Preliminary testing helps identify strategies that are unlikely to work, reducing the risk of overfitting.
  • Walk forward optimization analyzes the performance of strategies over real-time data to validate their efficacy.

Deep dives

Preliminary Testing: Identifying garbage strategies

Preliminary testing allows for quick identification of strategies that are highly unlikely to work by running a small test on a limited period of historical data. This saves time and prevents the use of excessive data, reducing the risk of overfitting. Strategies that perform poorly during this phase are discarded, filtering out the weakest ideas.

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