180: 3 ways traders kill trading strategies (and how to avoid them) – Rob Carver

On this BST live show, Rob Carver from systematicmoney.org joins us to discuss “3 ways traders kill trading strategies”. Here are just some of the topics you’ll discover in this episode:

• What can go wrong with strategies in live trading,
• The impact of model complexity on prediction error, (and are simple models really better than more complicated ones - the answer may surprise you!),
• The dangers of overstated backtest performance,
• The impact of historic costs on backtest results,
• The 3 types of overfitting, including 1 that most traders don’t even realise they’re doing, and how to reduce their impact on your trading models,
• Strategy robustness and letting data define complexity,
• The overfitting "levels of sin",
• Correcting for the "multiple testing problem",
• Fitting metrics, sample size, data quality, prediction error and much more.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.