Simulated annealing

What is the simulated annealing method?

A simple explanation of how it works:

Imagine you're searching for the highest point on a hilly landscape, while blind only with a measure of the altitude under your feet when you stop walking, with simulated annealing, you do random steps in different directions to find that highest point.

Initial randomness: It's like the "energy" you have at the beginning. High initial randomness allows you to take bigger, more random steps.

Randomness reduction per step: The percentage your energy decreases with each step, helping you gradually transition from exploring to refining your search.

As you "cool down," you're more likely to find the best trading strategy by narrowing your focus and making smaller adjustments.