Null hypothesis
The boring starting assumption in a statistical test: no effect, no difference, just luck. A test asks whether the data is surprising enough to reject it.
In plain English
The coin is fair, the drug does nothing, the strategy is no better than random. You assume this first, then check how surprising your data would be if it were true. Failing to reject it doesn't prove it; it means the evidence wasn't strong enough, like a 'not guilty' verdict.
Uncle Gary explains
Before accusing Uncle Gary's dishes coin of being rigged, Aunt Linda starts by assuming it's fair. Then she flips it 100 times.
Why it matters for your money
Our null hypothesis for every trading idea is 'no better than buying a random stock on the same day'.
Where we tested it
- Lesson 8: Is the Coin Rigged? Hypothesis Testing and the P-Value
- Lesson 15: Type I and Type II Errors: Why Small Tests Miss Things
Related terms
All glossary terms. Educational content, not financial advice.