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In-sample vs out-of-sample
In one line: Practice data versus fresh data the rule has never seen.
In-sample data is the practice period: the part of history you look at while building or checking a rule.
Out-of-sample data is the fresh part you keep locked away. Some rules only work on the practice data. That is like a student who memorised last year's exam: great score, until the questions change.
We want a rule to behave in both periods before we take it seriously.
Last checked: 2026-11-04 · Educational, not financial advice.
Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.