Many stks different results

Discussion in 'Stocks' started by clarodina, Oct 31, 2011.

  1. Have some questions for trader trading many different stks

    Test a system on 100 stks and produce many different equity curve. Some are smooth up trending, some are sideways and some are downtrending. Out of the 100 stks more 55% are positive. Should you choose those smooth uptrending equity curve for live trading?
  2. Automating systems is not about smooth up trending equity curves. It is more about does this system meet your goals and objectives on a continuous basis when using your trading plans methods. I have seen smooth equity curves get chewed up in real time trading by factors like increased slippage and changing volatility that turn a smooth equity uptrend into one that goes down very quickly.

    For example are you being rewarded enough on the average trade in relationship to your risk? In tests many systems produce small Win/Loss ratios and high percentage win rates with smooth equity up trends. However, in live trading when the win rate heads down that smooth uptrend on the equity chart takes a bigger than average drawdown and the trader abandons the system. If the trader had opted instead for a higher win/loss ratio system, the trader may have been able to trade though the drawdown.
  3. Know what you are talking about but wanted to know whether the smooth curve would hold up for those positive stks or is random. You use any system on 100 stks, there bound to have a few having smooth curve and some downtrending due to random factor. How to distinguish random smooth curve from real csmooth curve?