Most people do not know that short-term trading systems are gambling. With luck, one selection may go up – only to eventually fall flat…to NEVER recover.
BEWARE of high win percentages, lol.gA
I agree. High win percentages usually are the result of a “hold until profitable” strategy that may implode. I think there are a number of very good short-term trading systems here on C2 that are properly managed with stop losses and position sizing to limit risk. They have lower win percentages but better overall performance … better to have more money than try to impress people with your ability to “pick winners”.
always !!! and note draw down
Funny how Matthew Seldin appears as the best “Sim Trader” on C2. Do we really need such a worthless feature taking up so much space on the main page?
By “short-term trading systems”, I mean to refer to the shorter length of time a system can continue to succeed (less than a couple or few years). This differs to the definition given to the average length of time a particular system holds a trade, and is contrasted to “long-term trading systems” that by design continue to compound gains for multiples of years.
Gilbert
Excellent comment, Gilbert. The real money is made with the large moves. My system, OneSystem, has an average holding period of almost 17 days! Cuts down on needless commissions, rides the winners, cuts the losers, and sizes positions so they are all relatively equal.
Seems to me that it 19s best to pick a system to trade based on several important metrics. I just ran a scan on the Grid for all stock systems with the following parameters:
Over one year old
Annualized return over 15%
Maximum draw down less than 10%
% winners greater than 80%
The only stock trading system satisfying all these criteria currently is ETF VOLATILITY TIMER, which is only $39 monthly, with a 7 day free trial.
"winners greater than 80%"
Why 80% ? and whats the winning percentage has to do with profitable trading ? I dont see the relation .
My question as well - in fact the initial post was about not being fooled by high win percentages.
I would look at systems over one year old, that returned greater than 30% and had a max drawdown of less than 10%. Why would anyone trade higher absolute returns for a higher win percentage?
Win percent is perceived to be the holy grail. Most people think not handling the risk of per trade loss is best, when in fact it is most telling that a system will not trade profitably for very long.
Perhaps few month gambles with little invested is fun, but not a serious venture to compound managed wealth into your golden years.g
