# Win percentage



## It's Snake Pliskin (6 September 2006)

What factor contibutes to the win percentage the most if at all?


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## GreatPig (6 September 2006)

Getting it right...


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## MichaelD (6 September 2006)

Time frame. (Shorter = higher, Longer = lower)

Inverse response for win:loss ratio.


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## stevo (6 September 2006)

As a veteran member I was hoping that you had the answer to this one 

I prefer to consider the total dollars won versus dollars lost over a period (win/loss ratio). It's not that hard to have 60% winners and still lose money. The desire to have a high win % can mean that people take lots of small profits but hold onto some big losers. 

Hands up those who have sold something for a 5% or 10% gain only to watch the stock double or triple over the next 6 months - time frame is important.

stevo


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## tech/a (7 September 2006)

(1) Agree timeframe will be a determinent.
(2) So to will be tightness of stop.
(3) Initial capital can also be a factor as you may not be in the position to take as many potentially profitable trades.

I also agree with Stevo.
And Im sure you are aware (hence the questions) Win % combined with Profit % are important factors.There needs to be a balance and its different for each timeframe.

Stevo maybe able to shed some figures to add to mine.

But I have found.
Good short term single entity (Stocks or Futures) methods have around 60-80% win rates.Intra or a few days
Long terms have 30-40% win rates.Months and years
Medium term weeks and months.40-60% win rates.


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## stevo (7 September 2006)

Stats from my portfolio over the last 3.5 years up to the end of June 2006;
Percent winners = 57%
Profit Factor = 3.10 (Win$/losing $  realised trades only) 
Average hold time = 21 weeks
Longest trade = 99 weeks.

I like to have a % winners number around 50%.  I think that it is harder to trade a system that is too low, but it's not really an important number.

Basically there is a 50:50 chance of the next trade being a winner so I am not relying on any special knowledge to pick winners, rather the knowledge that the winning dollars will be, on average, 3 times greater than the losing dollars.

Stevo


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## Bobby (7 September 2006)

stevo said:
			
		

> Basically there is a 50:50 chance of the next trade being a winner so I am not relying on any special knowledge to pick winners, rather the knowledge that the winning dollars will be, on average, 3 times greater than the losing dollars.



Thats roughly how I play the game also, but do agree with Tech that with shorter  time frame trades its easier to do  better then 50:50 .

Bob.


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## It's Snake Pliskin (7 September 2006)

> As a veteran member I was hoping that you had the answer to this one




Well maybe I should be like you then. 



> I prefer to consider the total dollars won versus dollars lost over a period (win/loss ratio).



As you`ll see there is the other thread and you are not alone.



> It's not that hard to have 60% winners and still lose money. The desire to have a high win % can mean that people take lots of small profits but hold onto some big losers.



Yes, people do this don`t they. People with pissweek convictions and weak minds.



> Hands up those who have sold something for a 5% or 10% gain only to watch the stock double or triple over the next 6 months - time frame is important.




I would say everybody has done it.

So I gather your answer is time.


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## blueroo (7 September 2006)

stevo said:
			
		

> Hands up those who have sold something for a 5% or 10% gain only to watch the stock double or triple over the next 6 months - time frame is important.



Even though this could be a common occurence, I don't consider it to be important. Hopefully, the proceeds from the stock sold would be put to good use on other winners.

What do the books say? Never look back!

Hooroo from Blueroo


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## happytrader (7 September 2006)

I agree with Techs shorter timeframe figures being the most profitable.

Also the shorter the time frame the less likely you are to suffer from attachment to possibilities and flights of fancy instead of the reality.

Ever heard of Stockholm Syndrome? This is where victims become attached to their perpetrators. Solution - POQ.

Cheers
Happytrader


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## It's Snake Pliskin (8 September 2006)

Snake Pliskin said:
			
		

> What factor contibutes to the win percentage the most if at all?




A determination to win - creating a negative effect if wins are consistently small.

It doesn`t have to be positive to be a valid point.

Overall the win percentage doesn`t mean much by itself.


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## stevo (8 September 2006)

Happytrader,
"I agree with Techs shorter timeframe figures being the most profitable."

Tech did not actually say that short term systems were more profitable - just that good short term systems typically had win rates greater than 60%. 

I would say that on average longer term systems outperform short term systems - but then I haven't found the right short term system. Longer term systems are certainly easier to trade and have lower brokerage costs.

Stevo


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## ducati916 (8 September 2006)

*et al* 

Well the numbers disagree with all of you;

When linked to probability studies, the following was calculated;

Example;
An investor who can earn a return of 15% in excess of the Treasury rate, with 10% volatility. Calculated via standard deviations;

Probability of making Money
Scale...................................Probabilit y
1yr.........................................93%
1Quarter.................................77%
1month...................................67%
1day......................................54%
1hour.....................................51.3%
1min......................................50.7%

In the short-time frames, it is a 50/50 proposition, but stretched out to the longer time frames, the probabilities rise very high.


jog on
d998


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## stevo (9 September 2006)

Duc
I don't suppose that you have a link to the reference that you are quoting from.

stevo


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## tech/a (9 September 2006)

Hmm Duc youve acheived 2.26% nett profit over 8 mths in your example?

Whats wrong?

Id like to see the probability figures as well.


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## nizar (9 September 2006)

tech/a said:
			
		

> (3) Initial capital can also be a factor as you may not be in the position to take as many potentially profitable trades.




tech/a and others, 

just a question,

what happens if for example u have $x, and each position size is $x/10, so u can have upto 10 positions open at any one time. If you are fully invested, is it true that u will not exit your position until your (trailing) stop is hit? coz this means that u could be holding onto slow movers and missing out on rockets potentially...

if this is the case, what happens if while no stops are hit, your stocks that u have positions in are moving very slowly (albeit upwards) and ur system picks up a stock which is really firing, but your cash reserves have dried, so u cant take a position, do u decide to close one??

do u know what i mean, and what do u do in this situation?

obviously the one u miss out on could be a real winner and what determines the (degree of) profitability of your portfolio yet u have missed out because u are "fully invested"

also - wat im trying to get at, is that is there any other reason u would exit a stock apart from it hitting your stop?

Thanks


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## clowboy (10 September 2006)

Nizar,

the simpliest way to fix that problem is to tighten your stops.

Of course that could also mean you miss out on a stock that runs if it has a small corection but it will certainly reduce the ocasions that all your funds are tied up.

At the end of the day though if all your funds are in trade and not getting stoped out (so long as your system is profitable) then you are running at maxium effeciency and so you should not really be worried about the ones that got away.  Ideally wouldn't you like to have all funds in trade making (or losing) money all the time than only have half your funds in trade making (or losing) money all the time?


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## nioka (10 September 2006)

Snake Pliskin said:
			
		

> What factor contibutes to the win percentage the most if at all?



If the company is researched before the investment is made the chance of failure is reduced considerably.

 If you take more risk you will havemore losses %wise then luck plays a part.

Investors have a better % than traders.


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## stevo (10 September 2006)

Nizar


> If this is the case, what happens if while no stops are hit, your stocks that u have positions in are moving very slowly (albeit upwards) and ur system picks up a stock which is really firing, but your cash reserves have dried, so u cant take a position, do u decide to close one??



  That's easy: if you trade a system then you follow the system. I don't go off chasing the next hot stock.



> obviously the one u miss out on could be a real winner and what determines the (degree of) profitability of your portfolio yet u have missed out because u are "fully invested"



  And the one you just sold could also take off as well!



> also - wat im trying to get at, is that is there any other reason u would exit a stock apart from it hitting your stop?




 Yes - I "need" the money  . Or you have another exit strategy built into your lovingly constructed and thoroughly tested trading system other than getting a stop loss exit signal.

 Stevo


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## tech/a (10 September 2006)

> If the company is researched before the investment is made the chance of failure is reduced considerably.




Your first question which stevo has offered an opinion is a very good one and one I will give my view on later today--people over for lunch--they should be very tasty!!

As to the quote above.Ive not seen any evidence which supports this.

All analysis will only supply an opinion for opening or closing a position--nothing more. It is not the analysis which will supply the profit.


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## tech/a (10 September 2006)

nizar said:
			
		

> tech/a and others,
> 
> just a question,
> 
> ...





This is a good question one which I and many others have asked.
I believe I have found an answer.

Firstly the adage of you'll never make big profit taking little profits is fundamentally true.There will be times when a stock outperforms even the wildest expectations and *THESE* are the times when a *TRAILING STOP * should be incorporated into your trading---to capture that singual event which may never be seen again in the near future and give you a return on that trade which could have normally taken years.

But I'm jumping ahead of myself.

To answer the question in an encompassing way,you need to look at the whole way we trade.
As most know I prefer to trade Systems where I have "Blueprints" from which to "Benchmark" results.

To me the whole idea is to have *CONSISTANCY*.If I have this then I am a lot more comfortable trading considerably larger capital bases on Systems trades than I am in a Discretionary manner.

I can make the Big $$s using Leverage and pyramiding (Or reinvesting ) profits from closed trades.As I have shown even mediocre system performance can bring spectacular profit.

Specifically to the question.
When portfolio trading we have 8-12 positions when fully capitalised.Most systems will continue to show potential buys throughout the weeks and months---even years we trade it.

What you find or should find when testing your method is that the results will not vary greatly *REGARDLESS* which trade you take or when you take it.This is seen clearly by those with Montecarlo analysis capability.

[In Simple terms this form of analysis allows you to allocate as many alternative portfolios over x time all with the same capital base and all traded over the period.All will be different--some by a stock or so and some by all stocks.At the end it reports the performance of all of them]

What you find is a deviation from the average of X%.As an example the average maybe a 100% return with the worst being 60% and the best 150%.

We all want the 150% or the higher end of the scale.
The point is at the time of purchasing stocks we have no idea if that which we are purchasing will be a huge winner or be stopped out.We simply cant know.

The fact remains though that at WORST testing has given us the confidence that in this case a 60% return will be had.

What can we do to better increase our chances of trading in the top areas.

(1) We can use Trailing Stops to capture the moves described about---but be careful that a trailing stop isnt placed on ALL stocks and it becomes an exit.
(2) We can place a time and or Performance exit.
(3) We can test various position sizing and numbers of stocks in our portfolio.

Even so these inclusions will effect the very "Blueprint" our system has generated,so at best we are looking for overall better performance (And this can be measured in many ways other than profit) and a decrease in the deviation from the average.

*What does become clear * though is that *IT DOESNT MATTER * which trade you take or how long you sit in it---as long as your within the Blueprint of the method designed you will have confidence in your positive expectancy.This releases you emotionally and financially to take advantage of those factors which will have a far greater impact on your profit than attempting to get the very best of EVERY move in EVERY trade.

Can you associate with that Nizar? Takes a bit to get your head around.


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## Bobby (10 September 2006)

ducati916 said:
			
		

> *et al*
> 
> Well the numbers disagree with all of you;
> 
> ...



Hello Duc,

I think the above needs an examination , therefore being your statement  !   its you I ask to provide the origin of these probabilities ?

You take Care"
Bob.


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## Bobby (10 September 2006)

tech/a said:
			
		

> I have found an answer.




Tech,
I thought your post was Very Good.

Bob.


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## It's Snake Pliskin (10 September 2006)

Nioka,



> If the company is researched before the investment is made the chance of failure is reduced considerably.




This is a fallacy. It is quite clear that analysis is only a small part of trading and investing. 



> Investors have a better % than traders.




No one really cares who is better. It is the factor that`s important - the tread title.

Snake


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## happytrader (11 September 2006)

Just a comment:



			
				stevo said:
			
		

> Hands up those who have sold something for a 5% or 10% gain only to watch the stock double or triple over the next 6 months - time frame is important.




Getting over 'the one that got away' attachment thing is what makes a trader of anything a professional. I don't hear pro fisherman or car dealers talking about the one that got away. Their only interest is to manage whats in front of them. 

I absolutely agree that time frame is important. 'time in the market is everything'


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## Devil_Star (16 September 2006)

Hi, you guys have many good points on the topic. I believe everyone learns different things from their own experience. I particularly like tech's point ' consistency'. I have been searching for a system capable of minimising uncertainties and advancing consistently for some time. 

Just wonder what you guys think how long of an 'overal winning' timeframe or how many numbers of 'overal winning' trades can prove a system as a robustly or consistently winning one. 

After a year of trading ASX shares and observing the dow jones and nasdaq indices, I recently developed a trading system to day-trade the US CFD indices. I started testing it with $10,000 and completed 15 trades evenly in three weeks, 13 wins and 2 losses, made 40% return. Profit/loss for each trade is 
$354, -$263, -$395, $758, $157, $532, $312, $559, $363, $222, $1,138, $159, $201, $56, and $278. (The biggest win is $1,138 and biggest loss is $395. ).

For every single trade I risked maximum 5% of my capital ($500 out of $10,000). I am open to advices from you guys of how long later it is considered to be suitable for me to increase the trade size to maximise my profits while still keeping the risk under control. Anyone knows a way to work out the reliability of a trading system via historical performance?


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## tech/a (16 September 2006)

D/S you still have a discretionary trading methodology.
The bigger the sample size for testing the better.
I like to see 1000s of trades.
If its trading indexes I would like to see how it performs on many bourses.
Why not code it up and test it.


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## Private Investor (16 September 2006)

Snake Pliskin said:
			
		

> Nioka,
> 
> Quote:
> If the company is researched before the investment is made the chance of failure is reduced considerably.
> ...




I doubt very much that the likes of Warren Buffet would agree that researching a company to reduce the chance of failure is a fallacy 

For punters who day trade then obviously research is not of high importance but for investors, especially for those with low risk tolerances, then research and fundamental analysis is an essential part to minimising the investment risk imo.


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## professor_frink (16 September 2006)

tech/a said:
			
		

> D/S you still have a discretionary trading methodology.
> The bigger the sample size for testing the better.
> I like to see 1000s of trades.
> If its trading indexes I would like to see how it performs on many bourses.
> Why not code it up and test it.




Have you done much testing on intraday timeframes tech?

If so, how have you found it?


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## tech/a (16 September 2006)

No not a lot.

I do have intraday SPI tick data but havent had the time to work through any ideas.
Personally the Longerterm trading approach suits me best due to time restrictions.

I'm sure something could be worked out with the benifit of trading both ways.
Dont know that the SPI is ideal.

Radge has an interesting daily ASX thread going over on Reef.


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## professor_frink (16 September 2006)

tech/a said:
			
		

> No not a lot.
> 
> I do have intraday SPI tick data but havent had the time to work through any ideas.
> Personally the Longerterm trading approach suits me best due to time restrictions.
> ...




Thanks. I'll head over for a peek.


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## nizar (16 September 2006)

tech/a said:
			
		

> This is a good question one which I and many others have asked.
> I believe I have found an answer.
> 
> Firstly the adage of you'll never make big profit taking little profits is fundamentally true.There will be times when a stock outperforms even the wildest expectations and *THESE* are the times when a *TRAILING STOP * should be incorporated into your trading---to capture that singual event which may never be seen again in the near future and give you a return on that trade which could have normally taken years.
> ...




I just saw this reply now

Just one question:



			
				tech/a said:
			
		

> (1) We can use Trailing Stops to capture the moves described about---but be careful that a trailing stop isnt placed on ALL stocks and it becomes an exit.




How do u choose which stocks to put a trailing stop on? Does it depends on how the stock moves initially after u take a position?

Thanks for taking the time Tech, i appreciate it

CHeers


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## tech/a (16 September 2006)

Nizar.

A trailing stop is normally introduced to capture the body of a move that would be seen as extraordinary.
Say a stock increased 50% in a few days or weeks and it would normally have taken months or years or you were on a move that had NEVER happened before.

This would be the time to introduce a trailing stop.
Normally a lot tighter than an exit,and if trading a portfolio you would only use it where a price shock occured.
What your trying to do is preserve to quick profits from a just as quick loss.

If trading in a discretionary manner and in smalls a great idea.Still keep in a normal exit but introduce a trailing stop.

One good one I like is last support,moving it up as support finds higher bases.

Here is an example with APG


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## nizar (16 September 2006)

Thanks tech,

do u place your trailing stop loss some percentage below the current previous close and re-adjust daily?

what determinants dictate where exactly the trailing stop loss is placed?\

great example as well..


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## Devil_Star (16 September 2006)

tech/a said:
			
		

> D/S you still have a discretionary trading methodology.
> The bigger the sample size for testing the better.
> I like to see 1000s of trades.
> If its trading indexes I would like to see how it performs on many bourses.
> Why not code it up and test it.




tech, 
Yes, my entry decision is discretionary. It is based on my daily analysis of the market consensus on major governmental and corporate annoucements and news in regards to some weighting factors.  My exit is dependent on my trading goal and risk management strategis (this is mechanical). I used mannual trailing stop loss to secure minimum profits and chase after strong trends. Personally, I picture trading success is comprised of 30% luck, 30% analysis, and 40% risk management. I think 1000 trades will be too precise for me, and that will probrably take me 3 years to complete the test. I think I'll take 100 for a test. 

I day-traded ASX200 index CFDs (which is based on SPI) before, but I found it a bit hard to me because the daily volatility is not big enough and I can't find a channel to receive timely consensus view on the aussie market.


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## tech/a (16 September 2006)

*Nizar.*
In the example above the support which is the low.
They would be reset when a new higher low becomes aparent.
Another I have used is Parabolic SAR,and another is a 4 day weighted average.

*D/S*
I guess your left then with discretionary trading.
All you can do is develope your "Blueprint" from the trades you have made and will make.If your trading begins to deviate strongly from the Norm you'll know somthing is up.
The main thing though is to record and have that info.

It wouldnt give me the confidence to trade $100,000s which of course isnt that hard with CFD's.


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## Private Investor (16 September 2006)

Devil Star,

I think 100 paper trades is plenty to give you at least a good idea on whether your trading strategies are likely to be profitable in the long run.

Obviously, the more you paper trade the more reliable your test results will be.

Based on what I have seen friends do, 200 - 300 paper trades is more than adequate to determine whether you should start committing your hard earned to actual trading.

For most people, more than 200 - 300 paper trades starts becoming tedious and time consuming for only slight less reliable results than computer modelling exactly the same parameters over 000's of trades.


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## It's Snake Pliskin (16 September 2006)

Private Investor said:
			
		

> I doubt very much that the likes of Warren Buffet would agree that researching a company to reduce the chance of failure is a fallacy
> 
> For punters who day trade then obviously research is not of high importance but for investors, especially for those with low risk tolerances, then research and fundamental analysis is an essential part to minimising the investment risk imo.




PI,

You have missed the point entirely.

Analysis is only a part of it; I was referring to the big scheme of things.

As far as day trading and the investors` continuous attack on the topic, I agree to a very small extent - I don`t day trade, but on some occasions.

Look beyond the analysis.  
Snake


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## WaySolid (16 September 2006)

100 paper trades? I'm impressed. Certainly anybody who has this level of discipline has some positive traits going for them.

Personally paper trading has never worked for me, I like backtesting and then running with small size to start. Some of the systems I trade just could only be paper traded with a live simul account, not from the data alone anyhow.

Could just be my personality type potentially.


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## It's Snake Pliskin (16 September 2006)

> Obviously, the more you paper trade the more reliable your test results will be.




Actually PI, this is a fallacious comment.



> Based on what I have seen friends do, 200 - 300 paper trades is more than adequate to determine whether you should start committing your hard earned to actual trading.




An arbitrary amount. What`s to say the next 100 won`t taint the hypothesis?

Paper trading has its merits but is not to be relied on totally. Commit real money using sensible money management and that will determine one`s hypothesis - negative or positive. Once again it all goes beyond the analysis and the mentality of being right.

Snake


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## Devil_Star (16 September 2006)

tech,
You are right. I will keep an eye on my trading acc, and for sure I'd never risk further until a hypothesis is proven.


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## Private Investor (16 September 2006)

snake,

the way I see it there is no logic in your comment:



> An arbitrary amount. What`s to say the next 100 won`t taint the hypothesis?




because that is like saying - What's to say the next 100 won't strongly reinforce the hypothesis?  - or if someone computer models 100000 trades I suppose you would ask what's to say the next 100000 won't taint the hypothesis?

Basically you simply choose a sample size that is first meaningful and second practical to handle according to the resources and time at your disposal.

Imo 200 - 300 paper trades is more than adequate to determine whether you should start committing your hard earned to actual trading based on the success I have seen friends of mine have.

Regarding your comment in another post:



> PI,
> 
> You have missed the point entirely.




I don't think I have missed the point at all as explained in my post.


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## tech/a (16 September 2006)

There are positives and negatives on a small sample size.

Most individual tests I do only have 2-300 trades in the sample period.
Many return profit and look excellent.

However *Private Investor * I ask you this question?

More often than not when testing 10000 portfolios I'll have a return of 95% profitable or 500 porfolios that return a loss.
Would you trade the method which is fine on a singular test and 95% profitable on a larger sample size?
Lets say using serious money on leverage.

OR would you like it to be 100% profitable?
Is near enough good enough?


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## Private Investor (17 September 2006)

tech/a,

I am a self funded retiree.  I classify myself as an investor and even before retirement I never classified myself as a trader.  I don't "trade" so to speak.

My comment regarding 200-300 paper trades was in reply to Devil Star's post earlier and is based on what friends, who are successful active traders, showed me they did when they started out.

Statistically, imo 200-300 paper trades is an adequate sample size to test a strategy which includes entry/exit criteria, risk/financial management etc.


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## It's Snake Pliskin (17 September 2006)

> the way I see it there is no logic in your comment




Mr P/Investor,

As you will see my comment: "An arbitrary amount." is logical. If it isn`t then the English language is all wrong. Secondly, my question:" What`s to say the next 100 won`t taint the hypothesis?" was asked which you have answered - the purpose of communicating. So, are you saying your answer is illogical? See below:



> because that is like saying - What's to say the next 100 won't strongly reinforce the hypothesis?  - or if someone computer models 100000 trades I suppose you would ask what's to say the next 100000 won't taint the hypothesis?






> Basically you simply choose a sample size that is first meaningful and second practical to handle according to the resources and time at your disposal.



It seems sensible to not overstretch oneself - time, resources etc. Though I add nothing to the processes of P/T.



> Imo 200 - 300 paper trades is more than adequate to determine whether you should start committing your hard earned to actual trading based on the success I have seen friends of mine have.




This could be debated. What type of market were the 200-300 "trades" done in? Bull, Bear, neutral, sideways etc. These factors do count, so once again, 200-300 is arbitrary and this is mere opinion.



> Regarding your comment in another post:
> I don't think I have missed the point at all as explained in my post.




I`m sure you did. If you hadn`t you wouldn`t have commented. But, it doesn`t matter, you now know what I meant.   

Snake


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## Bobby (17 September 2006)

Private Investor said:
			
		

> I am a self funded retiree.



*Go away ~ Pond life !*


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## Devil_Star (17 September 2006)

I reckon the number games are subjective. Everyone has different perception to sample sizes and timeframe. As long as a particular methodology suits yourself for the long run, it will do good. But for testing, I think paper trading doesn't reflect traders/investors' real personality. I'd rather take a small size of trades, especially for index(CFD) trading where no commission is charged.


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## blinkybill (20 September 2006)

Bobby said:
			
		

> *Go away ~ Pond life !*




what have you got against self funded retirees bobby?   

don't you hope to be one 1 day ?


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## nioka (20 September 2006)

Bobby said:
			
		

> *Go away ~ Pond life !*



Can't understand why you would come out with such a statement to a SELF FUNDED retired person. Are you envious?


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## tech/a (20 September 2006)

> I'd rather take a small size of trades, especially for index(CFD) trading where no commission is charged




Could you elaborate perhaps with an example?


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## MichaelD (20 September 2006)

Private Investor said:
			
		

> I doubt very much that the likes of Warren Buffet would agree that researching a company to reduce the chance of failure is a fallacy.



This is most certainly a fallacy, one that fundies for some reason seem to be blind to.

If fundamental research value adds anything, then why do the vast majority of managed funds (i.e. professionals with vast amounts of money available to invest and to perform fundamental research) consistently underperform the market? Why did fundamental analysts continue to recommend HIH and OneTel as buys all the way down? Ditto Enron.

(Technicians are also guilty of essentially the same crime, btw.)


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## Julia (20 September 2006)

nioka said:
			
		

> Can't understand why you would come out with such a statement to a SELF FUNDED retired person. Are you envious?



Nioka

Understandably you are unaware of the history of the poster to whom Bobby was responding.  It has nothing to do with him being a self funded retiree.

The person concerned is a banned serial pest who keeps managing to get back into the forum by using a different user name.  Most of us can recognise him regardless of what name he uses.  

Trust me, Bobby's description of him as "pond life" is entirely appropriate.

Julia


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## Bobby (20 September 2006)

Thanks Julia !!

Hope BlinkyBill & Nioka understand now   

Regards 
Bob.


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## Devil_Star (20 September 2006)

tech/a said:
			
		

> Could you elaborate perhaps with an example?




There is no commision charged for Index CFDs, instead a certain spread is imposed. To test whether a system is ok or not, of course by taking the spread into considerations, total profit and loss points can be counted and summarised. For testing, $1 for 1 index point should be enough for traders of least risk profile.  That means, If the spread is 5, the cost of entering a trade is $5. So in this way, stake still does physically exist, but just at the prize of a decent dinner for each trade. Maybe doing a little better for taking the fear and greed counted, compared to purely paper trade.


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## tech/a (21 September 2006)

And the 10:1 leverage how is this considered?


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## coyotte (21 September 2006)

tech/a said:
			
		

> And the 10:1 leverage how is this considered?




Tech/A 

Do not see a problem with leverage with CFDs 

If you take out a $10,000 total position ,  ($300 margin say ) as long have you have the $10,000 to back it up.

The $10,000 can be anywhere eg: $10,000 worth of shares in CBA with Comsec  if a margin call is required you have the capital to back it up .

The Danger comes in when you are taking out positions that you can not cover if requied.


If I've got this wrong then please explain why
Do respect your views



Cheers


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## tech/a (21 September 2006)

> I'd rather take a small size of trades, especially for index(CFD) trading where no commission is charged




Cryptically I was alluding to the possible contradiction of small sized trades.

Leverage particularly 10:1 leverage is intended to afford larger purchases for less down.Not that you have to use 10:1.

So was interested in the comment relative to "Win Percentage"


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## nioka (21 September 2006)

Julia said:
			
		

> Nioka
> 
> Understandably you are unaware of the history of the poster to whom Bobby was responding.  It has nothing to do with him being a self funded retiree.
> 
> ...



Guess I'm too trusting. ( and inexperienced I suppose)


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## Devil_Star (22 September 2006)

tech/a said:
			
		

> And the 10:1 leverage how is this considered?




For indices, the leverage ratio is up to 100:1, otherwise, a lotta people can't afford to play the games, particularly for indices with large bases like DJIA, Hang Seng and Nikkei.


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