Can this strat make Money?!?

[Hotch]

Well, I've been devloping a strategy, and it's rather crazy, but anyway...

Working on FTSE (data from Finam Russian Brokerage Companyata Export ).

Win rate is obscenely high, the problem is the pip gains are small:

Year, Win rate, Average Pip Gains
02-03: 98.41%, 2.99
03-04: 99.27%, 2.00
04-05: 99.64%, 1.97
05-06: 99.60%, 2.95
06-07: 99.48%, 4.30
07-08: 77.66%, 2.95 (wahey for the crunch )


Now I think I should be able to make money from this, I just don't know how, my current thoughts are;

1-Find somewhere with uber tight spreads.
2-Develop it more (booo!)
3-Spreadbet (would spreads not matter? I don't know much on it)
4-Sell it to silly people on the win rate (j/k)

Help?

 

[£10kLoser]

The data you give is insufficient to make any comment.

We need to know how many trades and what the average pip loss is. Since you give the win rate to two decimal places that should mean at least 10,000 trades a year or your figures are pointless. That's 40 a day which is hard to believe.

Also, your system may suffer if your orders have some slippage.

It's also a bit random that you can still make 2.95 pips profit with 'only' a 77.66% strike rate.

I suspect you may not understand statistics and that your figures are not meaningful to two decimal places. In every set of figures you have to assess what is 'noise' and what is meaningful.

Initially, I would say that it's won't work because you're unlikely to get real a world spread of less than 2 pips - even if they claim 1 pip or even no pips.

Additionally, any system needs to have a margin to allow for the fact that when you trade it with real money, as opposed to demo trading or back testing, the emotional stress involved will mean that you don't get the same results. If we could implement strategies perfectly, trading would be much easier and you wouldn't see the large failure rate.

 

[Hoggums]

You need to add in the buy/sell spread to your calculations - I'm almost certain given those stats that your tiny profits will disappear in an instant.

Also - I've not seen the data - but you won't be able to open a trade at the open price on the spreadsheet at 8am Any SB will be priced off the future so you can't rely on those figures.

 

[Paul71]

Well, I've been devloping a strategy, and it's rather crazy, but anyway...

Working on FTSE (data from Finam Russian Brokerage Companyata Export ).

Win rate is obscenely high, the problem is the pip gains are small:

Year, Win rate, Average Pip Gains
02-03: 98.41%, 2.99
03-04: 99.27%, 2.00
04-05: 99.64%, 1.97
05-06: 99.60%, 2.95
06-07: 99.48%, 4.30
07-08: 77.66%, 2.95 (wahey for the crunch )


Now I think I should be able to make money from this, I just don't know how, my current thoughts are;

1-Find somewhere with uber tight spreads.
2-Develop it more (booo!)
3-Spreadbet (would spreads not matter? I don't know much on it)
4-Sell it to silly people on the win rate (j/k)

Help?

5-Live off it.
6-Have a few beers off it.

Why do you need anyone elses thoughts?

 

[jm99]

your using cash data, its useless to test with........for the reasons hoggums has stated. u need to test with futures data to get the real picture.

 

[Hotch]

£10k loser: I understand the stats, it is accurate to 2dp. (It's overtrading, but it's rather complex to slow it down atm).

Slipapge was one of the things i was worried about and hence asking for ideas.

Confirmed my thoughts on pip spread

Emotional stress; I'm automating it (10,000 trades a year i'll have to!)

Hoggums:

I know that, i just don't have that data atm.

jm99:

Don't really understand what you're getting at (my bad)


All i wanted to know was is it possible to make money on knowing where something is going, even if it goes a short distance, I would of thought there would be some way to make a profit. I guess it's hard to ask the right question when the strat is soo different.

Maybe not, guess I'll just develop it some more.

Sorry guys

Ofcourse the other idea is that i can just trade it manually daily and make 6,000 pips a year. Seems a bit boring though