What is sample size?Sample Size
How many data points a statistic is based on, such as the number of trades in a backtest; the fewer the trades, the more luck drives the win rate and returns.
Learn “sample size” in an animated lesson
- Indicators in Practice & BacktestingIndicator Confluence
Any single indicator is often wrong. When trend, momentum and volume all point the same way, the signal tends to be more reliable, but rarer.
- Indicators in Practice & BacktestingSample Size: Is 7 Wins out of 8 Reliable?
With too few trades, win rate and returns are easily swayed by luck. Use a confidence interval to ask: roughly where is the true win rate?
Related terms
See how “sample size” works for yourself with an animation you can drag and play.
Go to “Indicator Confluence”