the flaws of trade station output

Discussion in 'Technical Analysis' started by man, Apr 6, 2006.

  1. man

    man


    to me there are two basic stats: hitratio and payoff ratio (avg winner/avg loser). and thinking like this expectancy is the same in both cases.

    i think you are getting confused by thinking in absolute terms. the second system has double leverage and your absolute expectancy therefore doubles. in relative terms the systems are identical IMHO.

    nevertheless both profit factor and expectancy do not account at all for smoothness of results ...
     
    #11     Apr 11, 2006
  2. jerryz

    jerryz

    i'm not confused. are you? you still don't seem to get it. seems to me like you're changing the definition of expectancy to suit your argument.

    you said earlier that you did not think it's possible that two systems can have the same profit factor and have different expectancies. i gave you an example that shows it is possible. if you think the example is wrong, please correct it using your numbers.

     
    #12     Apr 11, 2006
  3. man

    man

    right. i don't get it.
     
    #13     Apr 11, 2006