Hello - how is the realism factor calculated? How should I best use this metric in my evaluation of systems?
Thanks - J
Joey -
I don’t know the details of calculation, but Realism factors close to 100 tend to be able to be best replicated by subscribers. Watch out for low RFs.
BUT, don’t rely solely on this, because I’ve seen some RFs that are not indicative of the system. The calculation sometimes gives weird results.
I personally look at it, and about a dozen other statistics, to “rate” a system.
Good Hunting!
Kevin
Like other metrics, just go with the flow. Some of these are rough and some may be off. The best way is to use a NUMBER of the metrics to evaluate.
Assuming the system has at least 3 months or 50-100 trades (young systems are likely worthless)… I consider:
–Profit Factor (most important, IMHO).
–Sharpe
–APD
–Realism/Keep After Worst Case Slippage
–Vendor Reputation (Kevin D would be towards the top, and people like Gilbert A or our own chat spammer at the bottom)
