Overfitting
The parameters of a trading system are selected to return the highest profit over the historical data.
Overfitting
A model developed with rules tailored to fit the historical data precisely.
Overfitting
Using the highest profit point for the selection of parameters of a trading system over a specific time period without determining the likelihood that the parameters will retain their profitability over other periods of price data.
As most traders are aware, the risk of research-based strategies is that of overfitting. If you define enough parameters and time periods, eventually you’ll find a combination that predicts the past very well—by complete chance.
Because of the specific and seemingly random nature of the Hindenburg Omen criteria, the phenomenon may be simply a case of overfitting.
 See also: Performance, Stock, Volatility, Point, Exchange
  
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