Expectancy above .50??

[maildigger]

Any suggestions on how I could evaluate a trading-method/system?

 

[shanoballs]

Quote from maildigger:

Any suggestions on how I could evaluate a trading-method/system?

I am not an expert on this but i would say first figure out if the strategy has positive expectancy. If the expectancy is positive then do a randomness test to see if the performance is due to luck.

More info:

Expectancy:
http://tradermike.net/2004/05/trading_101_expectancy/

Randomness Test:
http://129.3.20.41/eps/fin/papers/0205/0205003.pdf

Hope this helps

 

[ronblack]

Quote from shanoballs:

I am not an expert on this but i would say first figure out if the strategy has positive expectancy. If the expectancy is positive then do a randomness test to see if the performance is due to luck.

Positive Expectancy is a fancy way of saying that you make more than you lose, with a sufficient rate of success:

http://www.tradingpatterns.com/profitability.pdf

Ron