Just wanted to say that I'm actually enjoying this discussion. I can certainly see how comparing the results of active trading to using a simple buy and hold strategy is a good metric. And yet, I also fully understand that a strategy has to be evaluated against what the trading plan says, and how closely the actual results measure up against the possible results of a trading plan in case the plan wasn't followed religiously. In some ways, this mirrors well the notion that trading a higher time frame causes less stress and perhaps more overall profits rather than day trading in and out multiple times, except for the very few of course who can manage to trade intraday successfully.
Saying all that though, the fact that Lajax is up after 10 trading days is a good result in and of itself, so that is the first point that stand out. If I recall all the great stats that he has posted, and this time specifically in relation to the equity curve, I would say that after 10 trading days, this result is not nearly as good as you would expect given that very nice up-slopping equity curve. But, once again another "but", when I look at the data where he showed the distribution of all consecutive trades, I do seem to recall that most profits were the result of a few very nice trending days, so perhaps this current sample of 10 trading days didn't quite allow him to hit a few home runs since the market may not have offered it.
The last point that stands out for me is that when scanning these charts, there were way more points made about emotions that crept up into the trading decision process (which I enjoyed reading about since this makes this quite real), where as the backtesting and forward testing was a bit more mechanical, so its not a big surprise that the results are not as favorable as the results of the back testing and forward testing.
So in summary, I think that everyone is right. The fact that a small SIM profit was squeezed out is a great result when you consider most people lose money, but more personally, the fact that a trading plan was devised and mostly followed with positive results is a huge step in the right direction. The actual money gain though is small, and certainly not representative of the results that Lajax is going after I'm sure, and so this result does point to the fact that more needs to be added into the strategy or things need to be tweaked.
That's for documenting all of this so well Lajax.
I'm sure if you didn't take the time to post all of this for the benefit of everyone else, you'd be much further ahead yourself since you would have spent all that extra time on just working on it, so the effort is very much appreciated.
Saying all that though, the fact that Lajax is up after 10 trading days is a good result in and of itself, so that is the first point that stand out. If I recall all the great stats that he has posted, and this time specifically in relation to the equity curve, I would say that after 10 trading days, this result is not nearly as good as you would expect given that very nice up-slopping equity curve. But, once again another "but", when I look at the data where he showed the distribution of all consecutive trades, I do seem to recall that most profits were the result of a few very nice trending days, so perhaps this current sample of 10 trading days didn't quite allow him to hit a few home runs since the market may not have offered it.
The last point that stands out for me is that when scanning these charts, there were way more points made about emotions that crept up into the trading decision process (which I enjoyed reading about since this makes this quite real), where as the backtesting and forward testing was a bit more mechanical, so its not a big surprise that the results are not as favorable as the results of the back testing and forward testing.
So in summary, I think that everyone is right. The fact that a small SIM profit was squeezed out is a great result when you consider most people lose money, but more personally, the fact that a trading plan was devised and mostly followed with positive results is a huge step in the right direction. The actual money gain though is small, and certainly not representative of the results that Lajax is going after I'm sure, and so this result does point to the fact that more needs to be added into the strategy or things need to be tweaked.
That's for documenting all of this so well Lajax.
I'm sure if you didn't take the time to post all of this for the benefit of everyone else, you'd be much further ahead yourself since you would have spent all that extra time on just working on it, so the effort is very much appreciated.
