A common myth in trading circles is that you can assess the effectiveness of a strategy after just 10 trades. While tempting to believe — especially for new traders eager for quick results — this mindset is not only misleading, but can also lead to poor decision-making and premature abandonment of potentially profitable systems. In this article, we examine why 10 trades is almost never enough to judge a trading strategy, and what a better approach looks like.

The problem with small sample sizes

At the heart of this issue is sample size. In statistics, conclusions drawn from a small set of data points are inherently unreliable. Just 10 trades can easily be skewed by randomness, news events, or emotional decision-making. One or two large wins — or losses — can distort the performance picture completely.

Let’s say your strategy has a real edge with a 60% win rate. Over 10 trades, basic probability suggests it’s entirely possible to win only 4 trades — or conversely, win 8 — without it meaning anything about the long-term edge. The variance is too high.

A poor start doesn’t mean the strategy is bad. And a strong start doesn’t confirm it’s good.

Why judging early can be dangerous

1. Emotional interference:
Early losses often trigger doubt, leading to unnecessary changes to the strategy or abandoning it altogether. Similarly, early wins may create overconfidence, encouraging traders to over-leverage or ignore risk controls.

2. Confirmation bias:
After 10 trades, you may unconsciously look for reasons to believe your initial assumptions were right or wrong, leading to skewed evaluation.

3. Incomplete exposure:
Markets go through cycles — trending, ranging, volatile, calm. A 10-trade sample may occur entirely within one type of condition, giving you no insight into how the strategy performs in others.

What’s a better benchmark for evaluation?

To judge a strategy properly, traders should look at:

1. At least 50 to 100 trades:
This provides a statistically relevant sample and allows you to see how the strategy behaves across different market conditions.

2. Metrics beyond win rate:
Look at risk-reward ratio, drawdown, expectancy, standard deviation, and consistency. A strategy that wins only 40% of the time can still be profitable if the winners are significantly larger than the losers.

3. Performance during different sessions and volatility levels:
A robust strategy should adapt to different levels of liquidity, volatility, and news impact. A 10-trade window may not offer this range.

4. Forward testing vs backtesting:
Backtesting gives historical insight but forward testing in live or demo conditions helps assess execution quality and trader discipline — both of which matter as much as the strategy itself.

When might a quick evaluation be acceptable?

The only time it makes sense to judge a strategy after 10 trades is if:

• You’ve discovered systemic errors, such as violating your own rules or encountering consistent slippage or latency.
• The market conditions have completely changed (e.g., from low to high volatility) and the strategy wasn’t designed to adapt.
• The emotional toll of the strategy is too high for you to execute it consistently, regardless of potential.

Even in these cases, it’s not the strategy being judged — it’s the fit between the strategy and the trader.

Conclusion

The idea that you can judge a strategy after 10 trades is one of the most damaging myths in trading. It encourages impatience, emotional reactions, and flawed decision-making. Instead, successful traders treat evaluation as a long-term process, grounded in statistical validity, risk management, and behavioural discipline. Only through a large enough sample can you accurately measure a strategy’s true edge.

To learn how to properly test, refine, and stick to winning strategies, enrol in our professional Trading Courses at Traders MBA — where proven processes replace guesswork.