3 to 1 Ratio

Discussion in 'Strategy Building' started by DraXon, Nov 22, 2002.

  1. acrary


    Here's the results
    #21     Nov 22, 2002
  2. That's my type of reasoning, from first principles, and the numbers are close too, 6 vs 7.5 and the results, I guess, better than for other parameters.

    I knew that smaller stop-losses are not always the best solution.

    Incidentally, I noticed that 7.5 would work too for my systems, but had no idea why and did not want to use it because I had no good interpretation for it. But now I know why, thanks!
    #22     Nov 22, 2002
  3. wow! a lot going on here. So I guess those people who say, "Ah the market, one day it's up the next day it's down" are wrong. (notice how they say that, but they never trade their convictions?)

    Pretty simple system. And you could try just buy after a white candle and sell after a dark candle on the 30 min chart.

    At any rate, the real road these tests lead to are time stops and targets. After all, that's what MOC really is, just a time stop (or profit target.)
    #23     Nov 22, 2002
  4. Hey acrary...I don't know if you want to do any more or not.
    If you don't want to that's cool.

    But, I was wondering. What if you went long or short on the
    breakout of the 1st 10 minute bar, put a 3 point stop in and
    got out if you reached a 9 point profit target or , or market on
    close if target not hit?
    #24     Nov 22, 2002
  5. So then your system would be
    If after 1 hour the market has moved against me I'll take my loss
    But if I have a profit, I will hang on for 3 hours

    Lord help us all if I ever develope the capabilites to implement mechanical trading systems

    But I would like to learn how to test them.

    Pretty bad when even the wealth lab homepage is over my head.

    I can see how once a guy starts with this it becomes a passion which can never be subdued.
    #25     Nov 22, 2002
  6. I'm trying to see if I get this edge testing.

    So to test your system for an edge breakout, I believe you would test for going long after every first 10 min bar with 3 pt stop 9 pt target or moc.

    Then you would go short after every first 10 min bar with same rules,

    Then you would compare your results to both the longs and the shorts, and if you beat both of them you have a measurable edge.

    Is that correct?

    If it is, it's about the most exciting concept I have ever heard.
    #26     Nov 22, 2002
  7. no, you'd need more than that, because there is a time factor, in that the breakout may not occur on the next bar.
    #27     Nov 22, 2002
  8. My request:
    could you test the breakout of first 30 min and first 60 min bar assuming the stop loss of 7.5 and the target of 1% of SP500 value at the time of the trade (rounded to the nearest integer) or MOC if neither the target or stop-loss are reached.

    And alternatively, 9 pts for the target or only with this target if it is easier.

    I would appreciate that. Some people have been using the breakouts of this kind, so I am just curious how it works in the long run.

    If that's too much of a problem, no problem.

    #28     Nov 22, 2002
  9. Hi profitseer...Here's a chart showing how it would work on an
    ideal day. If the 2nd 10 minute bar had broke down, then you
    just reverse the strategy. Or, you could allow yourself 2 trades a
    day. If the first one gets stopped out, maybe try one the other

    I"m sure some of these guys, like acrary can think up alot
    of stuff to do with this.
    #29     Nov 22, 2002
  10. Okay...I think I understand what you're saying. Like go long or
    short on each breakout of a 10 minute bar at a certain time. Say, 9, 10, 11...etc. And, then find out which times were the most profitable and whether they were long or short trades, then just trade those times....hmmmmm:D
    #30     Nov 22, 2002