Hello, friends!👋🏻👋🏻👋🏻 Most of you have heard the combination of the words "trading system" many times.🙉
Today I wanna invite you to check your trading system, think about it's profitable. Or maybe even think about creating it💪🏻💪🏻
Let's Go🚀🚀🚀
🤜🏻There are 2 ways to check if the system is profitable.
The ☝🏻 way is trading in this system in real time, and the ✌🏻 is testing it.
System testing takes place in 3️⃣ stages:
1. Preliminary testing. At this stage, the idea underlying your trading system is tested.
2. Optimization. At this stage, the best parameters are selected.
3. Final testing. Testing takes into account the money management system.
Testing can be carried out in 2️⃣ ways:
🔺manual testing 🔺computer testing
💥The main parameters, that will let you know is your trading system is profitable.💥
🚩The total profit P (%)
🚩 The sum of all profitable trades S (P)
🚩 The sum of all losing trades S (L)
🚩 MIDD (maximum drawdown), drawdown
🚩 Recovery factor RF = P / MIDD
🚩 Profit factor PF = S (P) / S (L)
🚩 The total number of transactions
🚩 The share of profitable transactions (%)
🚩 The share of losing trades (%)
💥Often when creating trading strategies, traders pursue the maximum profitability of the system. However, it is more important not to increase the value of expected profitability, but to reduce the possible risk, which is expressed in maximum drawdown (MIDD).
The empirically established boundary value of the profit factor is taken equal to 1.6.❗
If Profit Factor (PF) of your system exceeds 1.6,it shows GOOD 👍🏻 efficiency, if less - BAD 👎🏻efficiency!
⚡ I recommend you to test your trading system first on virtual money, and then on real money. After that you can see a suitability of your trading system, and then you can start using it.
😊😊I hope you enjoyed my post, don't forget to support me with like 🌞, subscribe, for don't get lost!💋
IF the PF exceeds 1.6 like you said and you say thats GOOD it could also be VERY BAD if your strategy REPAINTS.
RocketBomb
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@GarethSA, how can you justify your words?
I don't see the reason in your comments.
You are trying to criticize my posts, but do not respond to comments🤷🤷🤷