Glossary › data snooping

Trading glossary · advanced

data snooping

Trying so many ideas on the same old charts that one of them looks great just by luck.

The fuller meaning

Testing many rule variations on the same data and keeping the best, so the winner partly fits past noise; also called data mining. The result overstates the edge. Defences: fix rules in advance, count every variant tried and keep untouched out-of-sample data for a final test.

data snooping, also called data mining.

Related words

at the money · backtest · backwardation · basis · call option · contango · delta · edge · entry trigger · exercise