How many trades do I need for a back test to be meaningful?
My back test shows great results over 25 trades. Is that enough to trust the strategy?
For education only. This is not financial advice. Trading carries a high risk of loss.
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1 Answer
Best answer
No. A sample of fewer than 30 trades tells you almost nothing. Aim for at least 100 trades, and more is better, across different market conditions (trend, range, high and low volatility).
- Include spread, commission and slippage.
- Keep some data aside (out-of-sample) and test on it after you finish designing the rules.
- Avoid changing the rules again and again until the curve looks perfect. That is curve fitting.
Then forward-test on a demo account before using real money.
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