areebs,
Are u putting your real money on this system or just giving paper trading calls ?
I just looked at trade list of 2009-10 and here is my views on it..
- Total winning trade = 218
- total loosing trades = 219
- biggest winner - 33% (1 trade) -- If I take out the this big winner then next biggest winner is 10.7%
- biggest looser - 10.6%
So where is the edge in this system ? How is it better then coin-flip system which also has 50/50 chances of winning. Max Risk to Max Reward ratio is also 1:1 (after taking out the 1 big winner).. So why would anyone will risk 1 rs to make 1 rs.
Here is extract from overall summary as given by you
Code:
Winners 556 (41.09 %) Losers 797 (58.91 %)
*Max. Consecutive 7 *Max. Consecutive 11
*Largest win 4932975 *Largest loss -991845
*# bars in largest win 100 *# bars in largest loss 5
- system is producing more loosers then winners
- largest loss of 9.9 lacks in 5 bars ? (can someone really hold on to this? What kind of human psychology is required ?)
- largest Win of 49 lacks in 100 bars ? (can someone really hold on to winning trade for such a long time ? What was MAE in this big winner trade? Can someone leave so much of profit on table ?)
If one takes optimistic view (which happens quite often to system developer), then every system looks great on backtesting... but when u put it to real test with money, it becomes difficult to trade.
These are very practical points that a trader has to address when moving from theory to reality.
At the end of we are human being and human psychology can't be backtested. But it plays 90% role in real trading.
If you can live with such a wild psychological swings, then great.. You can trade this system.. but I guess most of other people won't be (atleast I can't)
Areeb, you have raised my favourite topic of system development hence posting my views here. No other intention to hurt your effort. Infact, I appreciate it when someone comes up with system. Hope you take it as +ive criticism.
All the best and Happy Trading