What is backtest hit rate?

Backtest hit rate is the share of historical samples where the model's direction call matched the actual result.

Plain meaning

If a stage has a 65% hit rate, about 65% of samples in that set had the predicted direction match the actual up/down outcome.

Why it matters

Direction hit rate tests whether the model adds signal, but it is not the same as accurate return prediction and it is not a future guarantee.

How to read it

Read it with sample period, sample size, average return, median return and deviation types. Hit rate alone can hide the impact of large misses.

How it appears here

The backtest page separates grey market and first-day targets, showing sample distribution, win rate, average return, median return and deviation types.

Common mistakes

Treating historical hit rate as a future guarantee.
Looking at hit rate without the size of wrong outcomes.
Ignoring that sample distribution changes across market regimes.