Van Tharp's SQN — a grade for your sample, not a promise.
SQN grades the historical sample you feed it — it does not certify a system as tradeable.
Educational tool only — not financial advice. Verify figures with your broker.
The SQN Calculator (Van Tharp) is a sample-grading tool that answers: how strong is the signal-to-noise in a set of trade results, given the average R, its variability, and how many trades you have? It computes Van Tharp's System Quality Number, which rewards a high and consistent average R across a large sample and penalizes small or noisy ones.
SQN = (average R ÷ standard deviation of R) × the square root of the number of trades. Van Tharp caps the trade count at 100 inside the square root so that huge samples do not inflate the score indefinitely; the uncapped version uses the true trade count without that limit.
Van Tharp's original bands run roughly from below 1.0 (poor) up to above 5.0 (excellent), but these describe the historical sample, not future performance. A sqn calculator van tharp result is only as trustworthy as the trade sample behind it.
Because SQN scales with the square root of the number of trades, a very large sample would otherwise push the score arbitrarily high regardless of edge. Van Tharp caps the count at 100 so the number reflects quality rather than just sample size.
SQN grows unreliable on small samples — a few dozen trades is dominated by luck. Larger samples give a steadier read, but even then the score only grades history.
Keep in mind: SQN grades the historical sample you feed it — it does not certify a system as tradeable, and a high score on a short or curve-fit sample can collapse the moment it meets live markets.