|
PureBytes Links
Trading Reference Links
|
> Subject: preliminary results of my system
>
> i have recently started backtesting a system ive been working on. it is
> strictly an EOD system. last night i backtested every stock in the sp500
> from 1995-1998. my total trades totalled 295 (round turns). i had 159
> winning trades and 136 losing trades. currently the only money
> management system is 10% profit or a 10% loss. which ever comes first.
> no trailing stop. the day after the signal i enter the trade if it hits
> my predetermined price and when the price bar hits my stop(either at a
> loss or profit) i exit the next bar at the open so it goes without
> saying that i dont always make or loose 10% but over a large period of
> time i dont think it would matter much. My question is this? How does
> this compare to others out there like yourselves who are writting and
> using systems? what percent profitablity should i be looking for before
> take the plunge? i imagine that with a better money managment system my
> profitability could be much better.
>
> comments appreciated.
> regards, traderzee
>
>
When I started testing my system with paper trades, an investment
banker challenged me to do 8 out of 10 good trades. (My system
is a day-trading system). I pushed too hard for that, losing money
when I went to real-money trading. I THEN discovered a system bug
which, once fixed, made the system ten times more sensitive.
Anyhow, I've set my goal as 10% profit per month and have done that
2 out of the 3 past months. This past month, I decided to break the
day-trading rules because the system seemed to indicate a particular
stock would continue its exponential rise. The system was right
during the trading days, but had no clue about Brazil! Back to day
trading. I trade via the Web and in December did about 40 trades,
with a gross profit of 18.8% and commissions of 7%, leaving a net
profit of 11.8% (these numbers are off the top of my head... real
numbers and story at http://apk.net/~lake ).
It has taken 3 1/2 years to develop the system, test it with paper
trades, and now with real money. I am NOT a good options trader, nor
do I aspire to become one! This system was a test of a new math
concept I developed 25 years ago and someone said "If it's so good,
why not try it on the stock market?".
My advice: paper-trade as long as you can before putting real money
on the line. There are days and there are days, and you can't pick
one-of-each-type-of-day for system testing. You gotta take what the
market gives you and it can take a long time to get the requisite
variety of trading days to appear.
Cheers,
Rob Lake
Environmental Modeling Inc.
rbl@xxxxxxxxxxx
|