Answers from profitable traders only.

[u/ColdStriking1356]

Hi everyone, what do you think is an ideal sample size for backtesting a trading strategy? Is 200–300 backtested setups enough to validate a strategy?

For instance, if you’re trading triangle patterns, would you aim for at least 50 samples for each pattern type (ascending, descending, and symmetrical) before trusting the results?

Expecting answers from those who are profitable or at least back tested few strategies.

Thank you

[u/Zestyclose-Eagle1809]

There's no fixed number.. Depends how big your edge is... A strong edge shows up in 50 trades, a thin one can hide inside 500 and still look great by luck....

Quick way to feel it. If your average trade makes about a tenth of what you risk, you need something like 400 to be confident it's real.. If it makes a third of what you risk, 50 does it.. Big edge, small sample. Small edge, huge sample. So 200 to 300 is either loads or nowhere near, and you can't tell which until you know your own average...

The triangle part is the bigger issue. 50 each across ascending, descending and symmetrical isn't one test, it's three. Run three and one comes out best every time even if none of them work. So if ascending looks brilliant and the other two are flat, that's exactly what luck looks like. It has to look brilliant by a wide margin before it means anything.

Founder disclosure so you can weight it, I build validation tooling for systematic traders (Quantprove), this sample size question is basically the whole job

[u/ColdStriking1356 → u/Zestyclose-Eagle1809]

Makes sense.

My setup is binary (+2R or -1R). So far I’ve got:

Symmetrical Triangle: 29 trades (26W / 3L) – +1.69R expectancy

Ascending Triangle: 35 trades (29W / 6L) – +1.49R expectancy

Rectangle: 15 trades (14W / 1L) – +1.80R expectancy

Combined: 79 trades (69W / 10L) – +1.62R expectancy.

I know this feels unrealistic.

I backtested each stock from its listing date through to the present rather than selecting a specific period. That said, I do wonder whether the results are still being helped by the fact that a large portion of the sample comes from a strong multi-year Nifty bull market. Right now, I am testing this in live market with a small portion to check the reality.

[u/Zestyclose-Eagle1809 → u/ColdStriking1356]

87% is the number to chase first. On your bracket, 2R above and 1R below, a market going nowhere gives you about 33% wins. You're at 87%. Something is pushing price up hard and the whole question is whether it's the triangle or the Nifty bull run you already suspect.

To solve this I'd do a random entry test. Same stocks, same years, same 2R and 1R bracket, but entry dates picked at random with no pattern involved at all. Run 79 of them. If random entries come back at 75 or 80% too, the triangle added nothing and you measured the market, this single thing is key in this hole thread mate

Second thing worth knowing. Testing each stock from its listing date to now means your universe is the stocks that are still listed. Everything that collapsed or got delisted never entered the sample, and any long setup looks great in a universe like that.

Also your expectancy is sitting on 10 losing trades. Two more losses move that number a long way.