Statistical significance: do you think in p-values or vibes?

"It worked in backtest" usually means "it worked in one backtest". Statistical thinking asks whether the result could be luck, and the honest answer often surprises traders.

Statistical significance: do you think in p-values or vibes? — risk-reward diagram
A risk-reward ratio of 1 to 2

How rigorous are you?

  • how you test whether a result is real
  • the tools or approximations you use
  • the result you now believe was luck
Statistical significance: do you think in p-values or vibes? — bid-ask spread diagram
The bid-ask spread on a currency pair

The expectancy guide is the gentle introduction.

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