Expectancy per trade

Hi there,

for all out there who do a bit of system testing, can you help me out with what would be reasonable number for expectancy for Nifty on EOD data for swing trades. Is 1.1-1.2% per trade a decent number ??

Are there anything else I should be looking at apart from expectancy and drawdown.

Cheers,

Look for number of consecutive losers. Will you have the stomach to take that many consecutive losers the system may throw up?

I understand you. Drawdown figure covers exactly that. Its in a comfortable range. But you haven't answered my question. Is the range given for expectancy per trade in the ballpark for low, average, good, fantastic ??

Drawdown gives the loss from peak to valley bottom. No of consecutive losers tests your resolve to stay with the system.

I have no idea what the benchmark for expectancy is. I am happy with an expectancy of 3 or more. I assume you calculate the expectancy with the formula
(% of winners*Average wins) - (% of losers * Average Losses)

wt do you mean by 3 ? 3% expectancy per trade would be huge ?

Expectancy is the points you will make per trade over a long number of trades. When the figure is greater than one if means over sufficiently long number of trades you can expect to make money.

From your back test calculate the variables of the equation and put it in the equation. You will understand better. Here is an example

No of Trades: 100
No of Winners: 43
No of losers: 57
Total pts from Winners: 1720
Average pts from Winners: 1720/43 = 40
Total of Losers: 855
Average of Losers: 855/57 = 15
Expectancy = (0.43*40)-(0.57*15) = 8.65

This means that over 100 trades you can expect to make 865 points from this system.

That's fine, I understand expectancy. By the 3 you meant 3 Nifty points ?? You would be happy with a system which returned 3 nifty points !!!

Or are you talking about the ratio between total amount on winning trades to losing trades.

for systems developers out there.. i would like to know what would be good expectancy for trades on Nifty EOD. How is a 1.1-1.2% per trade ?