P-value
If nothing interesting were going on (the null hypothesis), the chance of getting a result at least as extreme as the one you got.
In plain English
A small p-value means the data would be surprising if it were just luck. Traditionally, below 5% counts as statistically significant. A p-value is not the chance that the null hypothesis is true, and a significant result isn't necessarily a big or important one.
Uncle Gary explains
A fair coin lands heads 60 or more times out of 100 only about 2.8% of the time. So when Uncle Gary's dishes coin does exactly that, the p-value is about 2.8%, and Gary's dishes days may be over.
Why it matters for your money
Test 20 useless strategies and one will probably have a p-value under 5% by luck. Always ask how many were tried.
Where we tested it
- Lesson 8: Is the Coin Rigged? Hypothesis Testing and the P-Value
- Do Trading Strategies Work? Here Are All 430 Versions We Tested
- Lesson 16: The Chi-Square Test: Is the Die Loaded?
Related terms
All glossary terms. Educational content, not financial advice.