When is Strategy a good one..?

W

Wippi1817

Hello,

I am wondering which parameters I should use in order to identify if my strategy is a good one or not - there exists a couple of statistic parameters but I don't know where I should start to optimize:

Profit Faktor
A PF above 1.5 is good, above 2.5 is excellent, and above 3.5 is world class (if based on at least five years of data)

Gain-to-Pain Ratio (GtPR)
A GtPR above 1.0 is good, above 2.0 is excellent and above 3.0 is world class

Cummulated ROR Curve
the curve should keep growing


Attached some links about this topics:
https://www.peterlbrandt.com/trading-performance/


Which parameters are you watching in order to monitor your performance?



Thx
 
Profit Factor does not say anything, if your Stops are wide, and your Take Profit is small.

The correlation between these both is the most important.

I think GtPR is what this talks about.
 
Wippi1817 said:
Hello,

I am wondering which parameters I should use in order to identify if my strategy is a good one or not - there exists a couple of statistic parameters but I don't know where I should start to optimize:

Profit Faktor
A PF above 1.5 is good, above 2.5 is excellent, and above 3.5 is world class (if based on at least five years of data)

Gain-to-Pain Ratio (GtPR)
A GtPR above 1.0 is good, above 2.0 is excellent and above 3.0 is world class

Cummulated ROR Curve
the curve should keep growing


Attached some links about this topics:
https://www.peterlbrandt.com/trading-performance/


Which parameters are you watching in order to monitor your performance?



Thx
More...
I would go with risk adjusted returns. So if you invest in a strategiy that takes on market, industry and business risk you won't compare it against a strategy that hedges out the first two.
 
A strategy is a good one when it has positive expectancy. Period.
Do you *expect* to make money?

Your question poses "strategy"; your comments juxtapose trading/performance. They ain't the same thing, and you conflate them only with a confused comprehension.

At any event, having positive expectancy is only halfway there: *real*life* dictates that we monitor relative risk, as well. "Relative?" Neither strategy nor trading can be evaluated without having an arbitrary reference -- so, for good or ill, you have to have a "Compared to what?" metric.

So, two questions result: Do you make money? as the first hurdle, and then, At what risk? compared between them.

Assessing market performance outside of these two questions is a fool's errand.
 
tommcginnis said:
A strategy is a good one when it has positive expectancy. Period.
Do you *expect* to make money?
More...

Agree, and when it behaves during live trading the way it's suppose to.
 
lovethetrade said:
Agree, and when it behaves during live trading the way it's suppose to.
More...
Strategies don't "behave;" markets behave.

Strategies are a static key trying to fit a dynamic market lock. Some fit better than others. Some fit better one day than the next. But they don't behave. The *market* behaves.

A *fixed* key, and a *dynamic* lock. Stay on your toes, always.
Understand that you are the tail, not the dog, and never forget who wags whom.
 
Wippi1817 said:
Hello,

I am wondering which parameters I should use in order to identify if my strategy is a good one or not - there exists a couple of statistic parameters but I don't know where I should start to optimize:

Profit Faktor
A PF above 1.5 is good, above 2.5 is excellent, and above 3.5 is world class (if based on at least five years of data)

Gain-to-Pain Ratio (GtPR)
A GtPR above 1.0 is good, above 2.0 is excellent and above 3.0 is world class

Cummulated ROR Curve
the curve should keep growing


Attached some links about this topics:
https://www.peterlbrandt.com/trading-performance/


Which parameters are you watching in order to monitor your performance?



Thx
More...


Profit factor is good enough if it's high
 
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