Overfitted

Overfitted - A strategy tuned too closely to past data (curve-fitted), performing poorly in live trading. In algorithmic trading, an overfitted model is one that “adapts so closely to historical data that it becomes ineffective in the future”. Developers warn that backtests showing great returns may be “overfitted” – the parameters were cherry-picked for past performance. An overfitted robot will likely blow up in real markets. Example: “We optimized the EA for one year of data and thought it was great – until it rekt us live because it was clearly overfitted.”