Sample size
How many observations a result is based on. Small samples swing wildly; large ones settle down.
In plain English
An average of three reviews, five trades or one evening out can say almost anything. As the number grows, luck cancels out and the result starts to reflect what is really going on.
Uncle Gary explains
Kevin says the new bar is the best in town. His evidence: one evening, during which he was the only customer. Sample size: one.
Why it matters for your money
A strategy with 12 winning trades proves very little. In our tests we use thousands of trades for exactly this reason.
Where we tested it
- Are Online Reviews Trustworthy? Five Stars From Seven Reviews
- Lesson 1: What Is Statistics Actually For?
- Lesson 6: Why Polls Only Ask About 1,000 People
- Is Fantasy Football Luck or Skill? Kevin's Three Titles, Tested
- Lesson 15: Type I and Type II Errors: Why Small Tests Miss Things
Related terms
All glossary terms. Educational content, not financial advice.