# Read a backtest report

> How to interpret every panel of the results view, and what to look at first.

Source: https://docs.texttoquant.com/guides/read-a-report

---

A results view has a lot on it. This guide is the reading order that stops you fooling yourself: risk
before reward, sample size before everything.

## 1. Start with the risk, not the return

<Steps>
  <Step n={1} title="Look at max drawdown first">
    The largest peak to trough equity drop is the pain you'd have had to sit through. Ask honestly:
    could you hold through it live? If not, the return doesn't matter.
  </Step>
  <Step n={2} title="Check the sample size">
    Under ~30 trades, treat every other number as noisy. A dazzling return on 6 trades is a coin
    flip, not an edge.
  </Step>
  <Step n={3} title="Then read the return and Sharpe">
    Total return tells you the reward; Sharpe (or Sortino) tells you how much risk bought it.
  </Step>
</Steps>

See the full definitions in the [Metrics reference](/docs/reference/metrics).

## 2. Read the trade quality

Win rate alone is meaningless. Pair it with the payoff ratio. A 40% win rate with big winners can
beat a 70% win rate with small ones. Expectancy (in R) is the single number that combines both.

## 3. Look at the chart and ledger

The annotated chart shows entries and exits on price plus the equity and drawdown curves. The trade
ledger lists every trade with its R multiple. Scan it for whether a handful of outliers carried the
whole result.

## 4. Check the honesty signals

The header shows a **Reproducible** chip (same query ⇒ same test) and, when a hold out split exists,
an always on **out of sample** verdict. If the overfitting aware statistics are present, read them:
a big Deflated Sharpe drop from the raw Sharpe means the result was mostly search luck.

<Callout variant="tip" title="Grade first, then dig">
  Use the letter grade to triage which runs deserve a closer look, then
  [validate the survivors](/docs/guides/validate-an-idea).
</Callout>

Go deeper with the [Analysis & export reference](/docs/reference/analysis).