Expected returns from a TA system

happytrader · 15 June 2007

Synergy said:
Admittedly I'm a novice and I don't really have much much of an idea about TA. In short i've played around with some past data in excel and developped a system that looks ok. Havn't traded it yet, but I at least feel comfortable having a go with it.

As for risk, i'm planning on trading with 10% of total capital/trade and have an initial stop at a 10% loss. so 1%/trade.

The system picks enough trades to be trading with 100% of capital 100% of the time. win/loss is around 50/50. avg hold time is 7 days and avg gain looks to be around 3% per trade. But on a big down note, I only have around 2.5 years test data, so i'm worried about that.

Knowing not very much about this, i'm pretty happy with what i have on paper, but didn't have anything to compare to.

Any help most welcome

Hi Synergy

Well done on gathering and testing 2.5 years of data for your short term system. While paper trading in real time is going to give you some idea of the systems performance, only live trading will reveal your own. This being the case, I suggest you don't trade 100% capital 100% of the time. The nature of short term trading is such that maintaining your self control and focus on decision making is your number one priority. So fight one battle at a time.

Cheers
Happytrader

Expected returns from a TA system

happytrader

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