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Hi Pierre,
If I understand what you are saying, you would prefer a system that has
many very small losers and a few large
winners. Certainly there is nothing wrong with that.
Please consider however that such an outline is not
normally the "modus operandi" of the short-term trader.
Our ideas on long term trading are not dissimilar.
Please note that we are talking MAXIMUM dd and not DD.
for example, this means for every 20,000 earned you have risked less
than 5,000 under the *worst* possible system
scenario. Mind you I am not talking TS max dd, but real
time max dd. I do agree that you would probably have to
times the TS max dd by 3 to approach the real max dd the
system may encounter.
I am not sure what you are trading, but I have never seen *any* system
that could trade profitably with a
winning percentage of less than 35%. It *may* be possible, but you would
have to have the psycholgical
temperament of a rock, and the patience and discipline
of a god. <g>
And you had better *never* miss a signal.... <g>
Walt
Orphelin@xxxxxxx wrote:
>
> Dans un courrier daté du 17/09/98 15:49:23 , vous avez écrit :
>
> << Here are good examples
> of expected figures from two different types of systems:
>
> System 1: Short - term.
>
> Win 70% or better
> Avg W/L 1.50 or better
> Profit factor : 3.0 or better
> Max DD : Less than 1/4 total net profit
>
> System 2: Long-term
>
> W % 45% or better
> Avg W/L 3.5 or better
> Profit Factor 5.0 or better
> Max DD : Less than 1/4 total net profit
>
> Regards,
> Walt Downs
> CIS Trading Cos.
> >>
>
> I strongly disagree with these criterion.
>
> The only intersting thing is ROMID (return on deposit +DD).
> You must achieve at least a DD= 1/10 of total net profit, 1/20 better but
> more difficult over the ong run
> % of winning trades and the like are only psychological measurement.
>
> I prefer to trade a <40% winning trade system with a low or acceptable DD and
> high ROMID than anything different.
> The only point that is impossible to live with is the DD.
> Even if you achieve high performance on other fiels and encounter an
> unexpected DD, you will stop to trade, genrally on a serious loss, even with a
> 70% of winning trade and other magic ratio.
> This will be the case with a 1/4 DD (DD is made to be reached some day and of
> far more).
>
> All these consideration are coming from real world experiences.
>
> Sincerely,
>
> Pierre Orphelin
> www.sirtrade.com
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