The parameters of a trading system are selected to return the highest profit over the historical data. A model developed with rules tailored to fit the historical data precisely.
Using too many covariates for the number of outcome events in a multivariable predictive model; can lead to spurious or incorrect associations.
Using the highest profit point for the selection of parameters of a trading system over a specific time period without determining the likelihood that the parameters will retain their profitability over other periods of price data. Also known as "Curve Fitting".