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Minimum Backtest Length Calculator

Test enough strategy variants on a short sample and one of them will look brilliant by pure chance. MinBTL (Bailey, Borwein, López de Prado & Zhu, 2014) answers: given N trials, how many years of data does a claimed Sharpe need before it deserves any trust?

How it works

The expected maximum Sharpe among N skill-less strategies grows with N: E[max] ≈ (1−γ)·z₁₋₁/ₙ + γ·z₁₋₁/₍ₙₑ₎ (γ ≈ 0.5772). For the claimed Sharpe to exceed what noise alone produces, the sample must satisfy T ≥ (E[max] / SR)² years (with an upper bound 2·ln N / SR²). Double N and the required history grows — the more you search, the more data you owe.

FAQ

I only ran one backtest. Is N=1?

Almost never. Every parameter tweak, universe change, or discarded idea you peeked at counts. Research platforms that let you iterate fast silently inflate N into the hundreds.

My data history is shorter than MinBTL. Now what?

Either reduce N (pre-register fewer, better-motivated trials), demand a higher Sharpe bar, or add breadth (more independent assets = more effective data). Do not shorten the question to fit the answer.

How does this relate to the Deflated Sharpe Ratio?

Same mathematics, opposite direction: MinBTL fixes the trust level and solves for required data; the DSR fixes your data and solves for the trust level.