Any good book on statistics side of system building?

[maxpi]

Quote from MAESTRO:

Approximately 6 - 8% a month net return on the money. 1 month a year is a looser (not more than an average winning month). The system is 90% robotic with the repair strategy triggered by a decision maker. That is about as much as I can tell.

I'm thinking that is doable on a really large account. If I ever get to launch time I'm thinking I can prove (to myself only) that much, much more than that is doable on a micro account.... not quite launched yet but 7 years into study and research. BTW, I found more profound stuff on brokerage websites and in trading software than elsewhere, people there have an incentive to help a trader. Other traders, books, trader's websites, helpful maybe, but breakthrough-profound level: almost never. In fact, I have found instances where the top expert published author in an area can be debunked in some of what he says.

In the area of academics, it is usually bad for one's career to be a debunker but in our personal study we will always have to do our own due diligence.

 

[inCom]

Quote from Nana Trader:

If you win for 9 months with 7% return and compounding
it will 183% return.
Now if you lose 7% last 3 months, your account return will
be 148%.
Second scenario could be worse, if your last 3 months lose
is 10% each, you return will be 134%.

So it's proving neither methods has any advantage over another.
Best/worst Scenarios depend just on your luck.

This example isn't proving anything, or at least not what we were talking about originally. You have to repeat it EXACTLY the same without compounding. If you do, you get 163% after 9 winning months with 7% and then 142% after 3 losing months. Again, by compounding you would have gotten better results, and this has nothing to do with luck. If your "luck" stays the same, by compounding you gain more and lose less.

 

[Sparohok]

Einstein supposedly called compound interest mankind's greatest mathematical discovery. I think one of the greatest strategic mistakes of many traders is the failure to compound their gains. If your risk controls are sound, compounding is the key to wealth. If your risk controls are inadequate you will eventually get wiped out whether or not you reinvest profits.

Martin