Backtest analysis reveals severe overfitting risks in multi-parameter trading filters, indicating that observed win-rate gains stem from small sample bias rather than true structural edge.
DECISION: REJECT ELEMENT: The filter "USDCHF SHORT @ NY_OPEN with 5 conf" is not a concrete, testable edge compatible with E8 geometry timing. It conflates a currency pair, a time window, and a confidence threshold into a single rule, but the backtest (n=67) is too small to distinguish whether the edge comes from the pair, the time, the confidence, or a spurious correlation. The 32.5pp improvement is likely overfit to recent volatility patterns that may not repeat. EXPECTED IMPACT: If adopted, win rate could regress toward 40–50% within 30 trades, and the filter would reduce trade frequency by blocking non-NY_OPEN USDCHF SHORTs that may have higher risk-adjusted returns. Net profit impact is uncertain but likely negative due to missed opportunities. RISK: The filter may degrade the model by (a) eliminating trades that are profitable outside NY_OPEN, (b) overfitting to a small sample, and (c) introducing a time-based bias that E8 rhythm logic already accounts for via Gods-Clock. Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com
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Andrew Stewart Caldin (2026) studied this question.
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