Win Rate and filters for entry

Discussion in 'Trading' started by monee, Jun 1, 2004.

  1. monee


    If one makes the criteria for entry more rigid some winning trades will be missed but the winning percentage on the trades allowed will be greater.

    What are everyone elses thoughts on this?
  2. ...I think you had better think about it. Monotonically increase the threshold for the entry criterion and eventually you will have no trades and zero profits. Come back when you know how to pose a sensical question.
  3. Turok


    >What are everyone elses thoughts on this?

    Not necessarily

  4. monee


    I realize the more filters you place will narrow the # of trades.

    True you could have so many filters that you would never place a trade.

    I'm speaking along the lines of only taking the best signals.
  5. Turok


    Only back/forward testing will help you determine whether stringent entry rules yield better signals or a better win ratio. It's not always so and often the opposite.


  6. The more rigid the criteria the more stocks you have to be able to scan in real time for those entry specific entry points.
  7. As a rule of thumb, the more variables you have the less reliable the system becomes. So, placing filters may improve your backtesting results at the expense of real time performance.