You Must Play Every Hand

[systematictrader]

Good comment Xela.
Can you touch on this a bit more? I have collected data on about 300 trades?

How can I gain statistical confidence in this as well for my next 300 trades? A book reference will be appreciated if no time to explain to me.

Thank you so much.

u can also read about Larry Hite, he is all about this style of trading as well

 

[systematictrader]

Just by having a method with a pretty fixed/constant edge under whatever circumstance you trade it (and only trading it under those circumstances, of course). The closer your win-rate is to 50% (on either side of it), the smaller is the number of "samples" you need, to achieve "statistical significance".

Ralph Vince (who sometimes posts here): The Mathematics of Money Management: Risk Analysis Techniques for Traders

Xela, i have a question please, on the number of samples, how do u gage it in terms of duration,,, for example,,, lets take the macd on a daily chart lets say,, i used to go back 20 years daily chart and back test for all of the signals and look for optimal outcome from various sources, then i found 20 years is too far back because its not very applicable to whats happening today for that instruments, then i switched to back testing still on daily chart but for only 9 months back this time, of course there are less samples,, so the question is how do approach the above mentioned when ur doing a longer period back which will have more samples but more irrelvant ones verus a shorter period which will have less but more relevant ones

thanks