Re: [amibroker] Re: Breaking the 70% winners barrier

 

Greetings --

I have a different point of view than that described in the Nial Fuller article.

My mantra is:
trade frequently
trade accurately
hold a short period
avoid large losses

I think 70% accurate trades is a reasonable target.  My books and videos show several systems that achieve 70% or higher accuracy.  My research shows that, in order to avoid equity drawdowns beyond my personal risk tolerance, systems that have the characteristics of my mantra work.  Systems that either hold a long period (subjecting the account to large intra-trade drawdowns) or are inaccurate (causing difficulty determining whether the system is working or broken), are not, for me, tradable.

In the article, position size is measured in R.  The article is not clear on how the risk portion of R was determined, but I strongly recommend that it not be a component of the model -- rather, have it as a component of the trading management system to give some control over determining system health and setting trade-by-trade maximum safe fraction of the account to use for the next trade.

In the first example in the article, the trader took many small profits and had a few large losses. 

In the second example, the trader took many small losses and had a few large gains.

The system rules are not explained, so the trades selected for the article are completely hypothetical.  A third alternative that has a high accuracy rate could have been illustrated, but was not. 

The charts and text suggest setting stop orders for exits.  Many US exchanges no longer accept stop orders.  Check with your broker.

Best regards,
Howard

On Mon, Feb 8, 2016 at 8:49 PM, wavemechanic olesmithy@gmail.com [amibroker] <amibroker@yahoogroups.com> wrote:
 

http://www.learntotradethemarket.com/forex-articles/why-winning-percentages-are-irrelevant-in-trading

On 02/08/2016 9:24 PM, pinaki_m77@yahoo.com [amibroker] wrote:
So what is usually the typical percentage of winning trades for most people? and what is it for those with above average and really high returns? Some real numbers from people in this forum will be helpful. All of this is pretty new to me, so knowing this will provide some context and hopefully push me to work harder on my algorithms :)


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Posted by: Howard B <howardbandy@gmail.com>
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