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MinBTL (Minimum Backtest Length)
QuantThe minimum number of trades a backtest must contain before its Sharpe ratio is statistically distinguishable from zero at a given confidence level.
Full definition
MinBTL (Minimum Backtest Length, Bailey et al., 2017) is the minimum number of trades a backtest must contain before its observed Sharpe ratio can be trusted to be statistically distinguishable from zero. A backtest with 12 trades and a Sharpe of 1.5 is essentially noise; a backtest with 1,200 trades and a Sharpe of 1.5 is signal. MinBTL formalises the intuition. On this site, MinBTL is gate G24 of the G1 to G31 evaluation stack; every published project reports its trade count against the MinBTL threshold for its target Sharpe.
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