Why Larger Samples Narrow Mean Uncertainty
Summary
Hollow Point Trading shares an explainer on how larger samples make estimates of the mean more precise without calming individual return swings. Using a sample standard deviation of two percentage points, it shows that 25 observations produce an estimated standard error of 0.4 percentage points—a useful distinction for interpreting trading data.
https://youtu.be/e_fedpySxJU
More observations narrow mean uncertainty, not individual swings #S...
A more precise average does not mean individual returns became calmer. Consider a hypothetical sample of independent observations with a sample standard deviation of two percentage points. With twenty five observations, the estimated standard error of the mean is zero point four percentage points. Hold that sample standard deviation fixed for co...
