Strategy optimisation: how many parameters is too many?

Optimisation finds the settings that worked best — and that's the problem. Every added parameter adds degrees of freedom, and past perfection is future failure.

Strategy optimisation: how many parameters is too many? — risk-reward diagram
A risk-reward ratio of 1 to 2

What's your rule?

  • how you limit parameters and ranges
  • the robustness checks you run after optimisation
  • the over-optimised result you believed once
Strategy optimisation: how many parameters is too many? — support and resistance diagram
Price bouncing between support and resistance

The expectancy guide explains why fitted results mislead.

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