Tuesday, 7 August 2012

It's a Numb3rs game

Trading with consistent profitability is a numbers game. We keep doing the same tested things time after time in order to achieve the same results. The things that change are how often or how many times a day, week or month we can repeat the process. If we can repeat these tested processes then we achieve CP. Making changes all the time is the enemy of CP. Henry Ford develped the production line method of manufacture so that less skilled people could do repetitive work and maintain quality.

One way of achieving this consistency in trading is using an algo to make the trades. This eliminated the need for constant concentration over a long period of time. With an algo, I can tune it to the market and have different settings for the busier and less busy times of day. Same algo, same settings since the 28 July when I retested.

This morning's  DAX, London time,  was pretty good. I didn't catch all the trades I would as a discretionary trader but that was not my goal. I want high win rate, low drawdown. I can scale size to earn more if I want.

1 comment:

  1. Very interesting things you are doing with your algo. Thanks for sharing these examples.