Sorry, I think I had to publish this here instead of the Trading Systems Forum * Hello everyone, I wonder if someone knows some good general guidelines to evaluate the effectiveness of a trading system.For example: 1
Sorry, I think I had to publish this here instead of the Trading Systems Forum * Hello everyone, I wonder if someone knows some good general guidelines to evaluate the effectiveness of a trading system.For example: 1
1. I would say that the longer the tests in the tests, the better, although I am not a fan of historical tests, they are a kind of curve adjustment to a certain degree.2. What works for you.3. It depends on your risk tolerance.4. Any system that does the opposite of what 95% of loser traders does.Your questions are very general, it is really not possible to give an adequate answer.
Hi, Prophet.Here you have a thread initiated by Silverpike that contains valuable information on this topic.The first three posts are the most important.Domo Arigato, Mr. Roboto!
Thanks, Mr. Roboto.It helped read what Silverpike had to say.
First, forget about the idea that there is a "perfect" system.No system will be consistent at all times, especially in changing market conditions.So, if you expect 100%predictable results, you are on the wrong way.That said, prove a system with at least 2-3 years of historical data and evaluate its performance in different market conditions.But remember, a good system also depends on trader discipline, not just numbers.
The problem with popular systems is that when everyone uses them, they lose effectiveness.The big market players know how to exploit them.Therefore, the key is not only the effectiveness in the tests, but also the adaptability of the system.For example, a system that works in trends may fail in side markets.Make sure you can handle both situations or that you know when to stop.Not everything is to follow the system blindly.
The amount of operations per month or a year is not as important as the quality of these operations.A system with 10 good operations per month may be better than one with 100 mediocre operations.If you focus on quantity and not in quality, you are likely to end an empty account.Focus on systems that prioritize precision and not just the frequency of entry.
Why are you still asking for the drawdown?If you have a 10%drawdown system, but you don't know how to handle your emotions, you will suffer the same as if it were 50%.The drawdown is a guide, not a fixed rule.Risk tolerance is something personal.Learn to know your limits before worrying about the numbers of a system.
The learning curve with automated systems can be steep, especially if you do not understand what the system does.Many traders simply buy a system without knowing how or why it works.If you want to succeed, study the principles behind the system and do not depend only on it.At the end of the day, even the best systems need human intervention at some point.
It is interesting how you raise the idea of ??many people operating the same system.While it has some logic, the volume operated and the amount of operations are not exactly the same.A great trader will focus more on the total volume than on the number of individual operations.Therefore, very popular systems that handle great sums can attract more attention from these players.
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