How can I make sure I'm not overfitting?
Before I write anything; please criticize my post, please tell me that I'm wrong, if I am, even if it's the most stupid thing you've ever read.
I have a strategy I want to backtest. And not only backtest, but to perhaps find better strategy confirgurations and come up with better results than now. Sure thing, this sounds like overfitting, and we know this leads to losing money, which, we don't want. So, is my approach even correct? Should I try to find good strategy settings to come up with nicer results?
Another thing about this. I'm thinking of using vectorbt to backtest my thing - it's not buying based on indicators even though it uses a couple of them, and it's not related at all with ML - having said this, do you have any recommendation?
Last thing. I've talked to the discord owner of this same reddit (Jack), and I asked some questions about backtesting, why shouldn't I test different settings for my strategy, specifically for stops. He was talking about not necessarily having a fixed number of % TP and % SL, but knowing when you want to have exposure and when not. Even though that sounded super interesting, and probably a better approach than testing different settings for TP/SL levels, I wouldn't know how to apply this.
I think I've nothing else to ask (for the moment). I want to learn, I want to be taught, I want to be somewhat certain that the strategy I'll run, has a decent potential of not being another of those overfitted strategies that will just loose money.
Thanks a lot!