My Selection Criteria

Discussion in 'Automated Trading' started by Pocketjacks, Sep 21, 2007.

  1. Pocketjacks

    Pocketjacks Guest

    Thanks for the input. I am not quite sure what profit factor entails. Do you have the definition anywhere? How do you use this to make a trading decision? I know that FXCM gave me a definition of all the terms, including risk factor, when I went on their chat feature but they are not open right now due to the holiday.

    The Team Aphid strategy looks pretty good although I am already running a EUR/USD strategy. While they are two different system I'd rather have some diversification within my portfolio. I'd consider GBP/USD but I tend to avoid GBP since it is so volatile. In case you haven't noticed, I am quite conservative when it comes to this program. I've done well in the short time I've had an account and I think a lot of it has to do with that. You can review my previous posts to see what I am running and why I chose the strategies I did.

    Personally, I like to wait until a system has done over 50 trades just to make sure the developer didn't get lucky a couple of times. As soon as some of the strategies you mentioned reach this level, I will look at them. The Prosignal Short Term EUR/JPY strategy, however, looks pretty good, this is one I will probably consider in the near future.

    Most of the success I've had in my portfolio has been through Technofinanzas. They only make one trade at a time and have been consistenly profitable since I signed up with them. Naturally you need to run a system for a few months to get a good idea of the returns. Week to week there will be some drawdowns, which mostly is the reason why people complain that this program doesn't work. Goodluck with your portfolio!

    #11     Jan 1, 2008
  2. superalf


    Hi Pocketjacks,

    Thanks for the reply. The profit factor of a system is the profit generated by all profitable trades divided by the losses generated by losing trades. So a higher profit factor is desirable. A profit factor of 2 would indicate that on average winning trades will generate twice as much profit as losing trades. So I like to use this as one of my main criteria since it takes into account not only profits but also losses.

    Yeah, I really like Tecnofinanzas. I'm increasing my leverage for this strategy this month, due to the low DD and high success rate.

    Good luck with your portfolio, and be sure to keep us updated on your results. I will do the same.
    #12     Jan 2, 2008
  3. Pocketjacks

    Pocketjacks Guest

    Thanks. Have you found the profit factor to point to be successful in picking well thought out strategies?
    #13     Jan 6, 2008
  4. superalf


    Yes, I have found profit factor to be useful in picking strategies. It's better than just looking at profit. My cut off point is 1.5 profit factor. Anything less than that, then I don't consider the system in question.

    Of course, as we've heard a million times, past performance is not indicative of future performance. So it's not a fail proof method, but so far it has helped me weed out bad systems and focus on the better ones.

    I made a 6% return last month! Not too shabby for December, which is normally one of the months with the least volume.
    #14     Jan 8, 2008
  5. Pocketjacks

    Pocketjacks Guest

    Thanks for the insight and glad to hear you did well last month. At the moment I am only running the Technofinzas strategy on EUR/USD and it has been quite volatile from the end of December until now. Overall it is holding its own but hasn't done as well as it did in the prior two months. The Prosignal Short Term strategy on EUR/JPY looks pretty good. It has a pretty low drawdown, only opens one position at a time and doesn't trade often. Since EUR/JPY took a nose dive recently, I'm glad it didn't get caught in that mess. I am very conservative and would need to put more money into the account before adding it but I think I eventually will.
    #15     Jan 14, 2008