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Thread: Curve fitting concept

  1. #1
    Junior Member
    Join Date
    Jan 2009

    Default Curve fitting concept


    I open this thread to discuss about curve fitting. I see a lot of ea's that perform good (in backtests - after optimizations). My question is: Is that of any use?
    I can proof that whatever EA you give me i can send you back a set of settings for that EA to make it profitable. (of course the ea has to put trades and not close them instantly or other "made to loose" setups).
    Second question would be: If i have for a given period of time an EA that performs extremly well -> low drawdown/high profit/big number of trades. How can i calculate the probability to trade the same in the next period of time and how long would that next period of time be?

    Thanks and hope you will like this discussion or point me to a place where this has been disscussed already.

  2. #2


    Day traders have to curve fit in hindsight to make a profit, as in real time volatility is random and its impossible to predict price direction.

    To make money in any form of trading you need to play the odds and you can't do that in day trading.

  3. #3


    Curve Fitting means fitting the trading signals to the data ( you can of course do this on past data as you know the closing prices ) and making sure that the track record is profitable.

    It's very similar to shooting at a barn door and then drawing a cirlce around each one, after the shots are fired to amek them all bulls eyes.

    Of course bending the system to fit the data doesn't work and profitability is simply an illusion.

  4. #4


    The statement is that there is some mathematical relationship between the quantities being graphed. The data aspires toward this mathematical ideal, but because of the limitations of human beings and their instruments it only approximates it. The data points of a graph form a cloud around the curve of a function. If only we had better "vision". If only our devices were better at recording the actual values. If only we really knew what the essence of nature was so that we could assign these devices to their intended task. Then we would see that every data point fell precisely on a perfect analytical curve. Unfortunately, real data never looks exactly like the ideal curves of mathematics.

  5. #5
    Junior Member Fxofficer's Avatar
    Join Date
    Nov 2010
    Canada, Quebec


    For what time period curve fitting must be done for best results?

  6. #6


    Curve-fitting in general is the process of finding the (mathematical) description which best matches a given set of data. When its not applied to trading strategies, it can be a very useful way of drawing conclusions from experimental data. When applied to trading strategies, curve-fitting can produce over-optimized, over-optimistic results. In any set of price data, there is some “magic” combination of indicators and parameters that catches most every move and shows outstanding results. Unfortunately, that magic formula is the result of chance and is different for every data set. That means that future results probably won’t come close to the numbers generated with the full benefit of hindsight.

  7. #7


    Try and trade any day trading system from a vendor in real time and you can kiss goodbye to your account equity. Don't fall for the hype of day trading systems see the reality, which is a sure fire way to lose all your money quickly.

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closing, high, indicators, low, magic, profit, profitable, real, signals, strategies, system, systems, time, trading, trading signals, trading system

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