The Illusion of Small Sample SuccessMany traders fall into the trap of believing a strategy works because it showed a high win rate in a sho

The Illusion of Small Sample SuccessMany traders fall into the trap of believing a strategy works because it showed a high win rate in a short backtest. This is a dangerous illusion. In options trading, where volatility and time decay (theta) play massive roles, a small sample size is often just random variance. If you test a strategy on only 20 trades and win 15 of them, you might feel confident. However, that sample is too small to distinguish between a genuine edge and a lucky streak. Overfitting occurs when you tweak parameters until the strategy looks perfect on historical...