System Testing

[suri112000]

Same system with different results.

First one is entry with full quota of lots and exits with full quota of lots.

Second one is entry with 1/2 quota of lots and add one with 1/4th of quota of lots, add two with 1/4th quota of lots (If the trade moves only in favour), exits of full quota of lots. (Pyramiding)

Pyramiding is able to control drawdowns. A kind of controlled trading results.

 

[suri112000]

Paper Trading a Strategy based on Directional Trade.

Buy Nifty futures August @ 8573 Qty 100
Sell Nifty 8600 CE September @ 189 Qty 100
Buy Nifty 8500 PE August @ 94.50 Qty 200

Total margin required to initiate the strategy = Rs.1,00,000

Will review the trade when Nifty futures is above 8700 or below 8400.

 

[suri112000]

Paper Trading a Strategy based on Directional Trade.

Buy Nifty futures August @ 8573 Qty 100
Sell Nifty 8600 CE September @ 189 Qty 100
Buy Nifty 8500 PE August @ 94.50 Qty 200

Total margin required to initiate the strategy = Rs.1,00,000

Will review the trade when Nifty futures is above 8700 or below 8400.

Nifty futures touched 8400 on downside.
Position as on today :-
Nifty fut august 8404. (loss of 16,900)
Nifty 8600 CE Sep 105 (Profit of 8400)
Nifty 8500 PE August 154 (Profit of 11800)

If the positions are closed, the profit will be Rs.3,300.

Let us do new adjustments,
book profits in 8600 CE and 8500 PE ------Rs.20,200.

buy Nifty 8300 PE August qty 200 @ 64
short Nifty 8500 CE sep qty 100 @ 148
Nifty futures hold as it is.

After new adjustments, the total profit made is Rs.3,300.

 

[suri112000]

What it takes to succeed in trading and what can be earned from trading.

https://www.youtube.com/watch?v=pUr5C33ntLM

 

[rammmeo]

One should fully convince himself that the system works in different sample periods.If it gives similar performance in different samples then it may be worthwhile testing it on different scrips such as Nifty,stocks futures etc....a good system normally works well in other counters too.

If the system is giving this consistant performance, then ask him to let you test the system for 2 months in real markets. Many times systems test great on system testers but fail in actual trading , so whether we can do all trades as per system is also important.

If the system satisfies all the above ( I am still skeptical though) then Rs 2,00,000 is a small price for that system.

Posting just to caution if someone is thinking of buying it....be 100 % sure that it will make money after you buy and trade it.

Why I am saying this is I know 2-3 cases of systems designers who designed good systems...but they failed to make any money from the markets trading on their own systems......they took others money to manage thinking that the systems will make tons of money for them and for the trader and ended up with huge losses in those accounts...so this caution...not to dampen the enthusiasm.

Smart_trade

Sir,

Have a small question is it necessary that system must work on all counters. i am too trading a system tht works on bnf but not on other counters . Hv been trading for 2 years now with a decent results. I hv tested it from 2007 and it only gave loss in 2013 and tht too minor loss.

 

[mailsu]

Data available for nifty future and banknifty are different in icharts.in and docs.google.com. Which one is correct? Also I want a free software to view CSV files in candlestick pattern. Please help.

 

[Somatung]

Nice and interesting thread. :thumb: Any more post's here?