Control group
A comparison group that gets everything except the thing you are testing, so you can see what that thing actually adds.
In plain English
To test a trading signal, we take a random stock on the same day and apply exactly the same rules. If the signal does no better than the random stock, the signal isn't doing anything.
Uncle Gary explains
Uncle Gary says his lucky socks make his team win. The control group: the games when he wore normal socks. Same win rate. The socks have been retired. The team has not.
Why it matters for your money
It is the most important question in any test, and the one most 'this strategy works' posts skip.
Where we tested it
- Does the Golden Cross Work? We Tested 72 Strategies
- Can AI Predict Stock Prices From the News? We Asked It 599 Times
- Does Buying the Dip Work? We Checked Which Dips
- Do Hangover Cures Work? Why Every One of Them Seems To
- Lesson 7: Ice Cream Doesn't Cause Sunburn
- Should You Buy Stocks After Good Earnings? Post-Earnings Drift, Tested
- The Employee of the Month Curse
- Can Achy Joints Predict the Weather? Grandpa's Knee, Tested
- The Sunk Cost Fallacy: Gary's Camper Van Will Pay for Itself
- Why Does It Always Rain on the Weekend?
- Do Support Levels and Fibonacci Work? We Drew Random Lines Too
Related terms
All glossary terms. Educational content, not financial advice.