Walk-Forward Analysis

Walk-Forward Analysis — A backtesting method that splits historical data into rolling train/test windows to validate strategy robustness.

Full Definition

Walk-forward analysis (WFA) splits historical data into chunks (e.g. 6 months train, 3 months test) and rolls forward through time. The strategy is optimised on the train window, then tested on the never-seen test window. A strategy that passes 5 of 6 walk-forward windows is far more reliable than one that just looks great on a single backtest. JPTradingCapital uses WFA on every setfile before shipping.

Related Terms

Backtesting · Overfitting

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