Decoded Intelligence Signal
Walk-Forward Efficiency (WFE)
advanced
strategy
Verified: May 27, 2026Lexicon Core Definition
The ratio of out-of-sample (OOS) Sharpe ratio to in-sample (IS) Sharpe ratio, expressed as a percentage; WFE > 70% indicates excellent strategy robustness; WFE 50–70% is acceptable; WFE < 50% indicates likely overfitting and warrants redesign before paper trading.
Analysis Breakdown
The ratio of out-of-sample (OOS) Sharpe ratio to in-sample (IS) Sharpe ratio, expressed as a percentage; WFE > 70% indicates excellent strategy robustness; WFE 50–70% is acceptable; WFE < 50% indicates likely overfitting and warrants redesign before paper trading. Full explanation coming soon when Journey 22 content is ingested.