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Hengy,
I prefer the "Points Only" test because it assumes a constant bet size. If one selects
the starting equity option, then the backtest will reinvest the full amount on every
subsequent trade. By using Points Only, I can make determinations about how many
additional contracts or shares I would invest as the system continues to perform. For my
testing and trading style, it's a more realistic approximation of what I would actually do.
The percentage that you refer to is for entering commissions and slippage. I use points
rather than percent, but that's a personal preference. I trade the S&P futures contract,
so I think of my slippage and commissions in terms of ticks. So it's easy to put in 0.5 or
0.25 points (2 and 1 tick respectively).
It would be the same if you had a broker that cost, say 1 cent per share. Then you could
put 0.01 plus whatever slippage you would assume based on your entries and the type of
stock you are trading.
These are just preferences and one person's opinion.
Dave Nadeau
Fort Collins, CO
3/4/2001 5:20:03 AM, "Hengy" <hengy@xxxxxxxxxxxxxxxx> wrote:
>Is there a reason why you use a points only test? Is this more appropriate
>for futures? If using percentage for a systems test, is there a translation
>for your 2 examples? Thanks in advance.
>
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