GLOSSARY · STATISTICS
What is sample size?
Sample size is the number of trades a performance figure is computed from, and it determines how much confidence any of those figures deserve.
What it means
Thirty trades is enough to notice a very large effect and nothing else. A hundred begins to be informative. Several hundred is where win rate and profit factor stabilise sufficiently to be treated as estimates rather than anecdotes.
Why it matters
This is a genuine and unavoidable problem for low-frequency strategies. A system taking ten trades a month generates 120 a year, so demonstrating an edge with reasonable confidence takes years, not months. Nothing can compress that timeline — running the same period through more backtests does not create more independent observations.
What this changes in practice
It is why our own figures carry the sample alongside them and why we say plainly that roughly ten trades a month makes any percentage unreliable. A vendor quoting a precise win rate from a few weeks of live trading is either unaware of this or relying on the reader being unaware.
How many trades it takes before a record means anything is worked out in how many trades before a track record means anything?
Related terms
- Wilson score intervalThe Wilson score interval is a confidence interval for a proportion that behaves sensibly on sma…
- Statistical significanceStatistical significance is the judgement that an observed result is unlikely to have arisen by …
- BacktestingBacktesting runs a strategy against historical data to estimate how it would have performed, and…
- Win rateWin rate is the percentage of trades that close profitably, and on its own it says nothing usefu…
- Monte Carlo simulationMonte Carlo simulation reshuffles or resamples a strategy's trade sequence thousands of times to…
- Gain percentageGain is the headline return figure on a published track record, calculated so that deposits and …
- Kelly criterionThe Kelly criterion is a formula giving the position size that maximises long-run growth rate fo…
- Sharpe ratioThe Sharpe ratio measures excess return per unit of volatility, allowing strategies with differe…
Educational information only, not financial advice. Trading leveraged products carries substantial risk of loss. Last updated 2026-09-09.