What you will learn
- Hypothesis
- Sample definition
- Entry and exit rules
- No-trade cases
Hypothesis
Start with a falsifiable question, such as whether a precisely defined setup has positive net average results under stated execution assumptions. The question should identify instrument, horizon and comparison rather than merely ask whether a chart pattern works.
Sample definition
Define the sample before reviewing outcomes. Include dates, sessions, eligible instruments and exclusion rules. Reserving a later unseen segment creates a meaningful distinction between developing a rule and evaluating the chosen rule.
Entry and exit rules
Freeze the entry, exit and sizing definitions for the evaluation. If a rule changes, assign a new version and do not pretend earlier outcomes were generated by it. Keep a record of every material variant considered.
No-trade cases
Prevent hindsight by revealing observations sequentially or recording only information available at the decision time. A complete historical chart contains future pivots, revisions and final bar values that may not have been available then.
Worked example
A learner adjusts a stop after inspecting each losing example. The resulting record evaluates many retrospectively chosen rules, not one rule that could have been followed prospectively.
Try it yourself
Write a study protocol with a fixed sample, one baseline rule, a development period and an untouched evaluation period. Include what happens if the rule changes.
Show the worked solution
A changed rule returns to development under a new version. The untouched period should not be repeatedly inspected to choose parameters; once used for selection, it is no longer independent evidence for that selection.
Apply this to your course project
Submit a rulebook, chronological trade sample and unseen validation results.
Keep the calculation inputs, assumptions and decisions with your work. Practical exercises are self-reviewed; the scored knowledge checks assess the questions shown, not an independent certification of practical competence.