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Tutorial 06 · 6 min
How to read performance metrics
Every pattern comes with statistics that tell you how strong and reliable it is. Understanding these four — Average Return, Win Rate, Std Dev, and Rating — is the key skill.
123
Avg Return
+3.7%
Win Rate
80%
Std Dev (σ)
4.6%
- 1Average Return — the typical move (your reward gauge).
- 2Win Rate — how often it repeated (your reliability gauge).
- 3Std Dev — variability; lower = more consistent.
Real-world example
A pattern shows Avg Return +3.7%, Win Rate 80%, Std Dev 4.6%, Rating ★★★★. That means: over the last 10 years, the stock rose an average of 3.7% in that window, was positive 8 of 10 years, with moderate variability — a strong, dependable pattern.
Step-by-step
- 1Average Return: the typical % move over the window, averaged across all years (signed — positive or negative).
- 2Win Rate: the % of years the pattern moved in its expected direction (up for bullish, down for bearish).
- 3Standard Deviation (σ): how much the yearly results vary — lower means more consistent.
- 4Annualized: the return scaled to a full year, so you can compare windows of different lengths.
- 5Rating: a 1–5 star score blending win rate, return strength, and consistency.
What to expect & how to read it
High win rate + meaningful average return + low std dev = a high-quality, repeatable pattern (4–5 stars). A high return with a low win rate means one or two big years are doing the work — less reliable.
Common mistakes to avoid
- ✕ Chasing the biggest average return while ignoring win rate and std dev.
- ✕ Treating a 100% win rate over only 2–3 years as proof — more years = more confidence.
Tips for beginners
- ✓ Win rate is your reliability gauge; average return is your reward gauge. You want both.
- ✓ Use the Rating to shortlist quickly, then dig into the individual metrics.