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<SPAN
class=758120615-16112003>agreed. if the fact that a trading system did well in
the past has no bearing whatsoever on whether it does well in the future, how
can we know anything at all about the future performance of a proposed
trading system?
<SPAN
class=758120615-16112003>
<SPAN
class=758120615-16112003>dave
<SPAN
class=758120615-16112003>
<BLOCKQUOTE
>
<SPAN
>The gambler$B!G(Bs fallacy
is a fallacy because the gambler ignores the independence of the outcomes and
looks for patterns that do not exist. If we have designed trading
systems based on recognition of patterns that precede profitable trading
opportunities, and if those patterns are persistent, then we no longer have
random, independent outcomes. Our trading systems do have serial
dependencies and upward sloping equity curves. So analysis of the equity
curve provides an indication of the health of the trading
system.
<SPAN
>
<SPAN
>Howard
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