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Win percentage

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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.
 
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?
Click to expand...

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.
Click to expand...

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

 
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?
 
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.

 
the way I see it there is no logic in your comment
Click to expand...

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?
Click to expand...

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.
Click to expand...
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.
Click to expand...

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.
Click to expand...

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

Could you elaborate perhaps with an example?
 
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.
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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.)
 
nioka said:
Can't understand why you would come out with such a statement to a SELF FUNDED retired person. Are you envious?
Click to expand...
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
 
tech/a said:
Could you elaborate perhaps with an example?
Click to expand...

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.
 
tech/a said:
And the 10:1 leverage how is this considered?
Click to expand...

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

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"
 
Guess I'm too trusting. ( and inexperienced I suppose)
 
tech/a said:
And the 10:1 leverage how is this considered?
Click to expand...

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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