Most important thing is statistics and logging everything you do and its results so you can see areas of optimization. Rather than trying to force your SL/TP (RR/DD) on the market. Statistics (logging each trade with as many data points of reference as you can gather and comparing results) will tell you everything you need to know on how your strategy will survive in the long-run, what factors you can stretch and still profit, etc. Believe in statistics because that is actually how the market works.
Sharp ratio? RR/DD? Profit factor? Expectancy ? Stagnation? Z score?
Here's my suggestion when having a look for systems on Myfxbook:
1. Broker: Is the connected broker reliable? Is the broker well-known and regulated by good regulators (like FCA, BaFin, FinMa, IFSC, NFA, ASIC (only for Australian traders!), ICB, ...). Keep in mind: VFSC and FSA are not regulators for international brokers (it's just a company license not a regulator's license)! Why? Because there might be some faked results being shown on the connected myfxbook system pages. Brokers come and go, they can be just created to show fake (to good to be true) results to possible clients and to scam them with faked EAs or PAMMs at the end. Another good question could be: Is the system working with other (good) brokers aswell? or: Can the system really work with my already used broker?
2. Drawdown: The max. account drawdown needs to be lower than 20%. If it's higher than 20% the system creator should definitely can explain it, like with a short spike, a testing period at the beginning (with a small deposit) or something like that. Also have a look on the DD charts by yourself, not only on the number on the left side of the system (click on custom analysis and check the 'open time' box in 'timing' for a better analysis).
3. History: Have a look on the history, to get to know if the system creator is using only low risk (low lot sizes and not much trades per day if no SL/TP is being used, or a good/low SL if higher lot-sizes are being used).
That's it. All the other numbers are not really interesting, just showing you how your results could be if you'd use the exact same system/deposit/trades/broker etc.
Two things will point north to any trading journey. 1. Live trade 2. Lower your Lot size Never give up your quest. There is a wonderful lifestyle at the end of your trading journey but it will take 10,000 hours...
damunwa posted: ...there was once a mechanic who went to visit a client having problems with his very expensive 4 color printing machine. The mechanic looked at the machine, walked around it a couple of times. He took out a listening rod and listened to the machine in a couple of places. Finally he went to his bag, took out a delicate little shiny hammer. He went to a specific point at the machine and with a determined and crafted poise he struck the point with a very precise and calculated hit. Instantly the whirling machine sounds changed and there was a more melodic tone in the air. The machine started spitting out copy after copy at very precise intervals of time. The machine was fixed. After a few discussions and suggestions from the machinists the invoice was handed to the owner. The owner looked wide-eyed at the amount to be paid. It was a bill for $1320.00. “You were here for less than 30 mins” said the owner “How do you rate that then?” The mechanic raised his head from the pad from which he had just written the invoice and looked at the owner. “Well” he said. “There’s 20 dollars an hour. And there’s 1300 dollars for my experience in knowing where to strike the hammer “ It’s the knowing where to strike the hammer that’s important in most endeavors. In trading this is the equivalent to the knowing where to exit in trading.
The most important factor is indeed stability. If you have system that has consistent results for years that is sort of Holy grail I have seen many systems that were like comet, going up fast as hell for a while and then BOOM.
togr posted: The most important factor is indeed stability. If you have system that has consistent results for years that is sort of Holy grail I have seen many systems that were like comet, going up fast as hell for a while and then BOOM.
Vontogr, Thank you for the reply. I have also concluded that the mathematical standpoint of degrees of freedom is an extreme important factor - therefore factors in with the stability of the system
"Formal education will make you a living, self education will make you a fortune"
There are several aspects of a good trading system. Risk management and stability are to name a few. It should have a good risk management strategy and there should be stability in profits. This will ensure growth sooner or later.
Consistency and stability are two of the most important aspects of a trading system. They can serve as indicators about your performance and will tell you how you are actually doing. A good risk management technique will also contribute to the different aspects of a trading system.
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
You could lose some or all of your initial investment. Do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.
Past performance is not indicative of future results.