Question 1

How many trades do I need before a backtest means anything?

Accepted Answer

There is no single magic number, but a handful of trades tells you almost nothing. Most people start to take a result more seriously somewhere past a few hundred trades, and even then only with caution. The right number depends on how big the edge is and how noisy the results are: small edges and wild swings need far more trades to show through.

Question 2

Why can ten trades look amazing and still mean nothing?

Accepted Answer

With ten trades, luck dominates. A coin can land heads eight times out of ten by pure chance, and a strategy with no real edge can string together a great short run the same way. A small sample does not have enough trades for randomness to average out, so a fluke and a real edge look identical.

Question 3

Does a bigger sample guarantee the strategy will work?

Accepted Answer

No. A larger sample makes win rate, expectancy, and drawdown more trustworthy, but it never makes them certain. The past is still the past. A big honest sample lowers the odds you were fooled by luck; it does not promise the future will match it.

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