Numbers/Percentages/Systems

Numbers/Percentages/Systems/Waffle

OK first off, my data does not go back far enough to be properly statistically significant as of yet but thoughts appreciated.

I am using a daily system, it is so far winning 47% of time.. erm doesn't sound great so far does it?

losing 53% (logically).

When it wins on average I make : 39 points
When I lose on average I make : -17 points

Therefore averaging circa 45 points a week or 9 a day (because presumably a little less than half of 39-17, half of the time is 9ish).

Am I wildly off here or is there some logic in it? Does anyone know what I mean?

Presumably if it maintained those numbers it wouldn't be a bad system (in my mind anything with a net profit has to be good,as can have multiple system uncorrelated and running different times of the day/markets etc)as half the time I am winning, I win twice as much as when I am losing... mathematically that makes sense.. although I am not happy about the fact I lose more than half the time.

Feel free to flame me, or join in on the thread. Would welcome views

So far so good.

It's all about expectancy. If (win prob * avg. win size) - (loss prob * avg. loss size) > 0, then you basically have an edge, and over the long run, a profitable system.

Check out this random equity curve simulator:

http://www.hquotes.com/tradehard/simulator.html

With an avg. win size of 39, and an avg. loss size of 17, your win/loss ratio is 39/17, or 2.29. Use that number as well as the win probability of 0.47 and see what your system does over the long run. Make sure you generate a couple of equity curves, but provided that your parameters will hold over the long run, you've got yourself a great edge.

DHB said:

It's all about expectancy. If (win prob * avg. win size) - (loss prob * avg. loss size) > 0, then you basically have an edge, and over the long run, a profitable system.

Check out this random equity curve simulator:

http://www.hquotes.com/tradehard/simulator.html

With an avg. win size of 39, and an avg. loss size of 17, your win/loss ratio is 39/17, or 2.29. Use that number as well as the win probability of 0.47 and see what your system does over the long run. Make sure you generate a couple of equity curves, but provided that your parameters will hold over the long run, you've got yourself a great edge.

Click to expand...

Thank you, that is the kind of thought provoking answer I am after. I still have a lot to learn but with money management/patience/steady learning and a market that is favourable to my system and other styles I may trade I hope I will be in it for the long haul. and thanks again for the reply and link, interesting :clap: