How does flipping a coin relate to trading probabilities? Simple, we can look at different probabilities of trading outcomes based on the distribution that results from a pure 50/50 chance outcome. What do I mean? Although the odds of a successful trade are rarely exactly 50/50, let’s assume that – for the moment – they…
I have been discussing trading strategy research I have conducted, which examines the relationship between your stop-loss chosen to the profit target chosen. In the past, I have discussed Win Rate and Net Profit – but let’s pause to view the 3 systems’ total trades taken based on the relationship. Please visit my earlier posts…
Earlier, I’ve been revealing results of my recent studies into the relationship of fixed stop-losses and fixed profit targets, and how the affected win rate. Now it’s time to see what the effects were on Net Profitability! Revisit the previous posts for full study details: Revisiting Stop-Loss and Profit Target Affect on Win Rate Does…
With the month of May winding down, it’s now time to see how many days resulted in an overnight gap, and how many of those overnight gaps filled, giving us clues as to whether or not the “Gap Fade” strategy continues to work. Using Excel and daily data for the DIA (Dow Jones ETF), I…
Earlier, I discussed Win Rate as a factor of Fixed Stop-Loss and Fixed Profit Targets, and I showed how it was easily possible to achieve a 95% win rate… but now it’s time to see if these outcomes lead to net system profitability. Please refer to the earlier post for the full descriptions and parameters…
What is the larger relationship between your stop-loss strategy and your profit target method? I tested three strategies and evaluated the change in win rate – % Profitable Trades – across 400 tests per strategy and present the abbreviated results here. First, let’s define the methods: DIA Daily chart from Jan 1 1998 to May…
When testing a trading strategy or idea, it is helpful to know what the Win Rate (also known as the %Win) is, and what factors might affect this portion of your results. But before we get too deep into the type of strategy you’re examining, it’s important to note the relationship between your profit targets…