FX · Building an FX strategy · lesson 6 of 9 · 9 min read · David Alexander
Sample size, and why your results mean less than you think
sample size
A win rate measured over a small number of trades carries a large margin of error. After 50 trades, a rule that won 35% of them has a 95% interval of roughly 22% to 48% - a range wide enough to contain both a strong edge and a losing rule. Distinguishing a genuine edge from luck takes hundreds of trades, and in most cases more than a retail trader will place in several years.
This lesson is part of the advanced modules.
Modules 6 to 8 are included with a paid account. The definitional summary above is the whole of this page until then.