Would you trade this (hypothetical) system?

[simcom]

I realise that the discussions of tight stops and random entries have been nearly done to death elsewhere on these forums recently, so my intention is not to start another one of these.

This is more of a question for the sake of personal interest. I have had somebody tell me about a method similar to this in the past and would be intrigued to see what thoughts are. I have never used this method myself.

Given the specific circumstances outlined below, would you trade this system? If so/not, why?

- Trades on Dow, spread betting
- Stats based on around 2500 trades over a 10-year period (1999-2008)
- Edge-less entry (effectively random)
- Very tight stop loss (about 10% of 14-day ATR)
- Average size of win compared to average size of loss = 7:1
- Percentage of winning trades = 24%

Essentially the positive expectation seems to be a result of the analysis of favourable vs. adverse excursion. What I mean is that the stop is placed at the point where the ratio between the trades that continue to go against a position compared to those that reverse and subsequently turn a profit is at its most favourable. This is better described by Curtis Faith in 'Way of the Turtle' for those that are interested.

So, can an 'edge' continue to be gained from good stop placement and 'bad' entry? Or is this not possible?

 

[Rossini]

I dont think there is enough infomation to comment.

 

[simcom]

I dont think there is enough infomation to comment.

Fair enough - to be honest I don't really have much more information. I guess the question I am asking is more general, i.e. 'Would I trade a strategy that has been consistently profitable over the last ten years considering it is based upon random entries at a certain time of day?'

Realised that I omitted the condition that the entries are made at the same time each day, and that the trades run until either stopped-out or end of day.