once you understand the math behind trading, and the reality that the markets are very unpredictable, then you won't be so hung up on winning percentage. There are excellent traders out there with win percentages around 50% and there are crappy traders with high win % that won't be around in a year.
the risk/reward and win %
- Thread starter traderkay
- Start date
Jack,
I'm never quite sure that I understand exactly what you are saying...but:
I've done a lot of testing on mechanical stock trading systems and the two that I am using now both use targets and neither uses stops. Both have a timed exit that gets you out on day 4 (these systems are based on EOD data).
Both systems have win/loss ratios of about 3:1. Profit/loss is about 1:1. Almost any stop system I've tried is detrimental to profit and doesn't really help smooth the equity curve much, if at all. The target is not essential, but does improve results a bit and smooths the equity curve.
Systems have been tested over 10 years of data and have done well over last 3 years. Unfortunately my database is only currently trades symbols and does not account for survivorship bias.
gs
Quote from jack hershey:
[See, that's why I said that you should write an e-bookYou could title it: "22 points a day - here's how"
A while back-- about two years ago i did a series of posts in MIF where a person could make 75,000 a year trading one trade a day on the DJXX during the first 30 minutes of the day.
I used MACD set to 5, 13, 6 for that with restraints on pace etc.
Jack,
would you, please, post additional rules ( if there are any ) to your DJ system ? i would like to try in on electronic DJ contract.
Thanks again,
Walter