Why Use a Train/Test Split?
If you have 10 years of historical data and no test set, you might have to wait another 2 years to collect enough
new data to evaluate your model.
By splitting your existing 10 years of data into 80% training (8 years) and 20% testing (2 years), you can start evaluating
and improving your model immediately — without waiting for additional data to arrive.
Scenario 1: No Test Set (Must Wait 2 Years)
Train: 10 years
Wait: 2 years
Test
Scenario 2: Train/Test Split (Immediate Testing)
Train: 8 years
Test: 2 years