How to Avoid Overfitting in Trading Bots: A Practical Checklist
Overfitting is the #1 killer of trading bots. Here’s a practical checklist to detect and prevent it, based on real experience.
Backtesting
The Backtest Looked Amazing. It Was Lying.
My momentum bot showed incredible returns in backtests. Then I learned about overfitting — the hard way.
Backtest vs Reality: Where Dreams Go to Die
My bot showed +500U in backtests. Live trading showed +200U. Here’s every gap I found and how I closed them.
How I Pick Coins for My Bot to Trade (Automatically)
My bot doesn’t trade the same coins forever. Every 3 hours, it picks the best ones automatically. Here’s the algorithm.
Parameter Optimization Without Fooling Yourself
Grid search found parameters that turned -82U into +343U. Here’s how I made sure it wasn’t just overfitting.