Account equity to place "at risk"

[mascurioso]

Hi,

Given that each trader must consider what their own comfort level of risk is based on his or her individual risk tolerance based on various factors like account size, trading style, etc., what would be considered a "prudent" percentage of one's account size to put at risk at any one time? For example, if I were trading a $50,000 account, would it be considered prudent to use up to half of the account on open positions at one time, or should the figure be much less?

Along these lines, what percent of total account equity does Tony Beckwith use for the Daily RT Report? It appears that Tony uses the leverage afforded him by Pattern Day Trader guidelines. Is this correct?

Thx,

Mas

[Tony Beckwith]

Mas

Thanks for this -

As for the Real-time Surgical Strike plan, this is based on risking no more than 1.5% of starting equity ($50,000 in this case).

This is very conservative, not least because it's fixed using the initial account size, with no growth in absolute $ risk as the account grows.

It's especially comfortable as pattern day-trader status will generally give mini-futures traders 4x buying power, if needed.

Just a quick reminder that that the daily RT Report is now available with Steve's Training Report off this page: http://www.mtpredictor.com/pricing/index.html

Regards and thanks again

Tony.

[mascurioso]

Thanks Tony, that's a helpful reminder about what fixed percent of equity to risk per trade. What about the percentage of the $50,000 to have exposed on all open trades? I know the RT Surgical Strike plan guidelines call for no more than two open positions at once, to make things more manageable. But the number of contracts used will vary for each trade, and by extension, so will the percentage of account equity tied up in those trades. So, what's the guideline you use? If I'm missing something, please let me know.

Thanks,

Mas

[Matt Bowen]

Hi Mas,

I'll take a shot at your question... If I'm wrong Tony can step in and correct me.

Based on Tony's rules in the guidelines (See page 6 from this link)
http://www.mtpredictor.com/pricing/documents/DailyRTSurgicalStrikereport061005.pdf

Tony is using 1.5 as a risk factor for these trade. Thus if you use the risk calculator inside MTPredictor (see picture below) you will see the software will tell you exactly what your position sizing should be base on this trade.

I took an example from Friday on the Dow Futures as we has a buy setup triggered in the Real-Time software (again see the chart below). Now, if this were the first trade of Tony's report we would simple tell the software we have a $50,000. trading account and we want to only risk 1.5 of the account Based on the trade setup below this means you have to know where you are getting in AND where you are getting out BEFORE you place the trade.(which MTPredictor automatically does for you).

Once you have these numbers you can go to the risk calculator and plug in your Entry, Initial Stop and the point value of the contract and it will tell you how many contracts you can trade...in this case it was 9 contracts.

Now, this is where your question comes in as to how much capital is left to trade for additional contracts or if new trades come up in the scanner...and this is a great question...

Well, if you take 9 contracts times $500 you see that we are only using $4500. of our margin leaving us with $45,000. to trade new positions. How did I come up with that figure? If you look at most on-line Futures Brokers you will see the "Day-Trading margins" are $500. per contract on the E-minis, thus just multiply your contracts by the $500. margin requirement.

We currently work with two Full-Service brokers at MTPredictor:

Berkeley Futures http://www.bfl.co.uk/

Terra Nova http://www.terranovaonline.com/



In addition, here are a few Brokers that have $500. or lower day trading margins. I know the owners of all three brokers and have worked with them individually, they are all very good people. Make sure you check out ANY broker and PLEASE do you own due diligence before your start trading with ANY broker.

http://www.advancedfutures.com/

http://www.openecry.com/

http://www.elocaltrading.com

Hope this helps,

[rosow]

Matt,
I think Mas was also asking the following and I'm kind of curious as well:

Let's say you have a $20,000.00 stock trading account and will be risking only 2% per trade. A great looking stock trade shows up in the scanner on a $50.00 stock. The stop loss is 2 points so you could buy 200 shares = $10,000.00. Now $10,000.00 is 50% of your trading account. Do you take the trade or is there a rule that a max % of your trading account is allowed on one trade. This will happen to stock traders a lot more than futures traders. I'm not sure if this is addressed in the course. Steve, feel free to pipe in here as well.

Regards
Lenny

[mcdirt]

$500 margin per contract? Holy Crap, my margins at MAN are ...

ES $5200
NQ $4650
AB $6000
YM $4000

They are only giving 1/10th the leverage!

rgds McDirt

[mascurioso]

Matt,

Thanks for shedding light on how Tony uses his account equity. You've helped to at least partially answer the original question I asked, which was what guidelines are being used regarding how much of one's total account equity should be tied up in active trades at one time. I say partially answered because although you've explained very clearly that each trade will take up only $500 of margin (for trading futures, obviously), and that logically it would take an unusually large number of contracts (50) to tie up even half of the $50,000 starting equity, you haven't addressed if there is in fact a "rule of thumb" Tony, Steve, or you use (as experienced traders) regarding the percent of account equity to use on open trades at one time. As Lenny points out below, this is of particular interest to stock traders, where if we hewed to the number of contracts the Initial Risk Calculator computes for us (not that we would, as it's our responsibility to think for ourselves based on our own risk profiles) we could easily tie up a large portion of our trading capital for no special high-probability reason. Most of what I've read, and common sense, says to tie up less than 30-50% of account equity at one time on open trades. I'd be interested in your perspective on this.

As a side note, for those of us who are using Zaner as a broker (and MAN as their clearinghouse I think), below are the maintenance margin rates for the Dec 05 vehicles McDirt mentions below, as of 10/14/05. I can only speculate as to why they're lower. My understanding is that daytrading margins at Zaner are usually half of these rates. They are still MUCH higher than any of the places Matt mentions. And, they don't accept GTC trades, which is a BIG hassle. I wonder if there are service trade-offs attendant with the lower rates? For newer futures traders, this may be an important factor.

ES $3150
NQ $3000
AB $2700
YM $1950

[Tony Beckwith]

Hi Mas, Lenny and McDirt

Thanks for this thread - it's very interesting to hear your thoughts on these issues, we appreciate the feedback.

Just to clarify from me:
1. Yes, the % of starting account equity risked on each Surgical Strike plan futures trade is 1.5% max. In this case, $750.

2. Although we have agreements with Terra Nova and Berkeley Futures for commission reimbursements to our customers trading with them...we are not shackled to them.
Talking with Global Futures recently, it's clear they offer e-mini futures margins at $500...(in fact $300 day trading margins are available for up to 10 lots, if using Patsystems execution - but $9.95/r-turn and U.S. clients only).
http://www.globalfutures.com/

3. Account equity tied up in margin at any given time - the Surgical Strike plan is conservative - on past experience, a max. 40 lot trade (YM due to very small initial $ risks) ties up $20,000 at $500 each (40% of nominal account equity only).
If there's an opposite- direction open trade, say 20 lots, that's another 10%. Total 50%.
I like to keep it deliberately conservative!

Thanks again

Tony

[mrkam]

I was taught by my earlier Fib/Elliott trading coaches (system is pretty much IDENTICAL to MTP, only manual!!! pretty cool really...) but anyway, they taught me to use TWO factors in sizing a trade:

1) risk %, as is talked about here. 2-3% risk in any SINGLE trade.
2) no more than 20% of account in any ONE trade.

One of these will control. As mentioned in an earlier post, meeting that risk % might take 50% of your account. In this case, the 20% max would control, and the position would be reduced to only 20% of your account, meaning your risk % is actually MUCH less than the 2-3% allowed. OR... maybe your risk % would only take 10% of your account, so the risk % controls and your limit your position size to 10%, even though your "rule" is max 20%...

Just one way of looking at it... with a 20% limit, you would carry maybe 5-8 trades at a time, pretty easy to manage, even at EOD...

[hodger]

I think if you want to position trade stocks the only way to do it unless you have a huge account is to trade CFD's. Matt is always mentioning the leverage you get trading futures and he is right. But you can achieve similar leverage trading Stock CFD's. The broker I'm looking at requires only 5% margin on highly liquid stocks. I ran a spreadsheet over the course of about 2 months using a $100,000 account and 3% risk on S&P stocks only. The longest I was ever in a trade was 18 days and most were far less. The MTP trade module always showed I was over my account limit but of course I would only use 5%. I never came close to using up my available margin. Using MTP defaults and trade management produced very good resuts.

Bob

[marcus]

Hi to all!
Doing a Monte Carlo Simulation using the following parameters:
Number of trades: 1000
Number of Iterations: 1000
%win: 45%
Avg.winn/Avg.loss ( as I saw posted here as one of the best performance): 3.0x
The result is :
There is a 99.99% probability as to HAVE a DrawDown of 27 units of risk!
Pay attention: This is TOTTALY DIFFERENT OF 27 LOSSES IN ROW!!!!
Using the Fixed Risk money management ( as I saw posted on the site!) and a max Risk/Every Trade of only 3%, one get:
-50% of current equity as max amount of loss.
In some papers, this is called as RISK OF RIUN.
But this is only my opinion!

Please, in turn, let me know anyone reading this my explanation:
Using your MTP or any other system and 4H time frame , the frame starting at 2:00 GMT, that is : 2, 6, 10,14,18,22,2, but not at 00:00GMT: 0,4,8,12,16,20, as usual, the performances will be the same?
Valid for any other system using multiple time frame trading!

Thanks,
Marcus

[pbb]

Who is gonna risk 3% per trade trading shortterm markets, are you?

[Steve Griffiths]

Hi Everbody,

I agree with Peter, this is exactly why 2-3% should be an absolute maximum, and this figure should be even less if you are new and/or day trade.

Steve

[marcus]

Hi,Steve!
You meant you agreed with my simulation Monte Carlo? I'm not Peter!
Now:
Would you be so kind as to replay to my last inquiry?
Using your MTP or any other system and 4H time frame
Fist experiment:
1. The frame starting at 2:00 GMT, that is : 2, 6, 10,14,18,22,2,
2. The second experiment: time frame starting at 00:00GMT: the current 4H time frame: 0,4,8,12,16,20, yhe performances of your system will be the same?
It is important when starts the 4H frames?
Valid for any other system using multiple time frame trading!

Thanks,
Marcus

[Steve Griffiths]

Hi Marcus,

No, I agree with Peter, 3% is an absolute maximum and should ideally be less, particulary if you are new or day trading, here 1% would be better.

On the time frames, this is just what the RT date feed gives us, the efs's work off the RT charts, so it is whatwever you plot in esignal or on TS8 using the eld's.

Thanks

Steve

[Matt Bowen]

You can Risk 1 percent of your capital, you can risk 5 percent, or you can risk 10 percent, but you better realize that the more you risk, the more volatile the results are going to be.

-Ed Seykota

That's why we stick to 3%... You might want to also consider reading this excerpt from Dr. Tharp's Report on Money Management:


John was a little shell-shocked over what had happened in the market over the last three days. He'd lost 70% of his account value. He was shaken, but still convinced that he could make the money back! After all, he had been up almost 200% before the market withered him down. He still had $4,500 left in his account. What advice would you give John?

Perhaps your answer is, "I don't know. I don't have enough information to know what John is doing." But you do have enough information. You know he only has $4,500 in his account and you know the kind of fluctuations his account has been going through. As a result, you have enough information to understand his money management -- the most important part of his trading. And your advice should be, "Get out of the market immediately. You don't have enough money to trade." However, the average person is usually trying to make a big killing in the market, thinking that he or she can turn a $5,000 to $10,000 account into a million dollars in less than a year. While this sort of feat is possible, the chances of ruin for anyone who attempts it is almost 100%.

Ralph Vince did an experiment with forty Ph.D.s. He ruled out doctorates with a background in statistics or trading. All others were qualified. The forty doctorates were given a computer game to trade. They started with $1,000 and were given 100 trials in a game in which they would win 60% of the time. When they won, they won the amount of money they risked in that trial. When they lost, they lost the amount of money they risked for that trial.

Guess how many of the Ph.Ds had made money at the end of 100 trials? When the results were tabulated, only two of them made money. The other 38 lost money. Imagine that! 95% of them lost money playing a game in which the odds of winning were better than any game in Las Vegas. Why? The reason they lost was their adoption of the gambler's fallacy and the resulting poor money management.

Let's say you started the game risking $1000. In fact, you do that three times in a row and you lose all three times -- a distinct possibility in this game. Now you are down to $7,000 and you think, "I've had three losses in a row, so I'm really due to win now." That's the gambler's fallacy because your chances of winning are still just 60%. Anyway, you decide to bet $3,000 because you are so sure you will win. However, you again lose and now you only have $4,000. Your chances of making money in the game are slim now, because you must make 150% just to break even. Although the chances of four consecutive losses are slim -- .0256 -- it still is quite likely to occur in a 100 trial game.

Here's another way they could have gone broke. Let's say they started out betting $2,500. They have three losses in a row and are now down to $2,500. They now must make 300% just to get back to even and they probably won't do that before they go broke.

In either case, the failure to profit in this easy game occurred because the person risked too much money. The excessive risk occurred for psychological reasons -- greed, the judgmental heuristic of not understanding the odds, or in some cases, the desire to fail. However, mathematically their losses occurred because they were risking too much money.

What typically happens is that the average person comes into most speculative markets with too little money. An account under $50,000 is small, but the average account is only $5,000 to $10,000. As a result, these people are practicing poor money management just because their account is too small. Their mathematical odds of failure are very high just because they open an account that is too small.

Hundreds of thousands of hopefuls open up their speculative accounts yearly, only to be lead to the slaughter by others who are happy to take their money. Many brokers know these people don=t have a chance, but they are happy to take their money in the form of fees and commissions. In addition, it takes many $5,000 accounts to feed a single multi-million dollar account that consistently gets a healthy rate of return.

Look at the table below. Notice how much your account has to recover from various sized drawdowns in order to get back to even. For example, losses as large as 20% don't require that much larger of a corresponding gain to get back to even. But a 40% drawdown requires a 66.7% gain to breakeven and a 50% drawdown requires a 100% gain. Losses beyond 50% require huge, improbable gains in order to get back to even. As a result, when you risk too much and lose, your chances of a full recovery are very slim.

[prh]

Below you will find the report on the MTP EOD on commodity futures contracts for the period August 11 - December 31, 2005. This is the continuation of a report published previously for the period of January 1- August 11, 2005. The MTP algorithm for stop and profit taking were used in a modified format as follows:
In Scheme 1: the stop moves to break-even when prices hit the 100% risk level, and profit is taken at the x2 zone
In Scheme 2: the stop moves to break-even when prices hit the 100% risk level, left there and profit is taken at the x3 zone
In Scheme 3: the stop moves to break-even at the 100% risk level, moved to the 100% level when prices hit the x2 level, and profit is taken at the x3 zone
In Scheme 4: the stop moves to break-even at the 100% level, the stop is left there until prices hit the target zone, and then the stop is trailed under the daily low or above the daily high until stopped out. This is the original MTP algoritm.

Energy contracts were not traded due to the very large initial risk. Single contracts only in each trade. In Scheme 4, several trades are still open.

Scheme 1
ALL TRADES: 11091.6
Number of trades: 34
Number of winners: 15
Number of b/e: 0
Number of losers: 19
Percent winners and b/e: 44
Percent b/e: 0
Largest Win: 3050
Smallest Win: 225
Largest Loss: -1406.3
Smallest Loss: 0
Winner size (mean) 1231
Loss size (mean) -389
Median Win 820
Median Loss -250
Total Wins: 18473.4
Total Losses: -7381.8
Overall P/L: 2.502560351

Scheme 2:
ALL TRADES: 13392
Number of trades: 33
Number of winners: 10
Number of b/e: 4
Number of losers: 19
Percent winners and b/e: 42
Percent b/e: 12
Largest Win: 4650
Smallest Win: 337.5
Largest Loss: -1406.3
Smallest Loss: -10
Winner size (mean) 2090
Loss size (mean) -396
Median Win 1779.4
Median Loss -250
Total Wins: 20908.8
Total Losses: -7516.8
Overall P/L: 2.781609195

Scheme 3:
ALL TRADES: 15218
Number of trades: 34
Number of winners: 12
Number of b/e: 16
Number of losers: 6
Percent winners and b/e: 82
Percent b/e: 47
Largest Win: 4650
Smallest Win: 0
Largest Loss: -750
Smallest Loss: -20
Winner size (mean) 1709
Loss size (mean) -251
Median Win 860.65
Median Loss -192.75
Total Wins: 20519.3
Total Losses: -1505.5
Overall P/L: 13.62955829

Scheme 4:
ALL TRADES: 8891.2
Number of trades: 30
Number of winners: 5
Number of b/e: 16
Number of losers: 9
Percent winners and b/e: 70
Percent b/e: 53
Largest Win: 4600
Smallest Win: 762.5
Largest Loss: -750
Smallest Loss: -10
Winner size (mean) 2473
Loss size (mean) -184
Median Win 2464
Median Loss -125
Total Wins: 12368.5
Total Losses: -1653
Overall P/L: 7.48245614

----------------------------------------------------------------

Several observations:
Each scheme was very profitable. Schemes 3 and 4 reflects still have open positions with profit. Most of the profit comes from a few trades. One trade had a large loss (Bonds) and its size was decreased in Scheme 3.

How do these result compare with the previous report?
Jan-Aug Aug-Dec
P/L Scheme 1 3.33 2.50
P/L Scheme 2 4.45 2.78
P/L Scheme 3 4.27 13.63
P/L Scheme 4 6.92 7.48

Total profit Sch1 10256.45 11091.6
Total profit Sch2 15218.05 13392
Total profit Sch3 14385.05 15218
Total profit Sch4 26076.8 8891.2

The results are quite similar. The P/L of 13.63 in Scheme 3 is a fluke and probably reflects the fact that the stop is moved up rapidly. The total profit in Scheme 4 is underestimated as there are open profitable positions both in Scheme 3 and 4, more so in 4.

================================================== =
FINALLY, Here are the compounded results for the entire year. There are still open profits in Scheme 3 and more so in Scheme 4. Regardless, the results point toward the robustness of the algoritm designed for MTP by Steve Griffiths. The key is indeed to minimize the risk and to aim for profits in large multiples of risk. The ABC setups detected by MTP allow for detecting minimal risk setups. The data are listed below.

Scheme 1 (all of 2005)
ALL TRADES: 21348.05
Number of trades: 62
Number of winners: 26
Number of b/e: 5
Number of losers: 31
Percent winners and b/e: 50
Percent b/e: 8
Largest Win: 3050
Smallest Win: 225
Largest Loss: -1406.3
Smallest Loss: 0
Winner size (mean) 1274
Loss size (mean) -381
Median Win 1075
Median Loss -292
Total Wins: 33135.55
Total Losses: -11787.5
Overall P/L: 2.811075292

Scheme 2 (all of 2005)
ALL TRADES: 28610.05
Number of trades: 61
Number of winners: 19
Number of b/e: 11
Number of losers: 31
Percent winners and b/e: 49
Percent b/e: 18
Largest Win: 4650
Smallest Win: 337.5
Largest Loss: -1406.3
Smallest Loss: -10
Winner size (mean) 2133
Loss size (mean) -385
Median Win 1800
Median Loss -292
Total Wins: 40532.55
Total Losses: -11922.5
Overall P/L: 3.399668694

Scheme 3 (all of 2005):
ALL TRADES: 29603.05
Number of trades: 62
Number of winners: 22
Number of b/e: 22
Number of losers: 18
Percent winners and b/e: 70
Percent b/e: 35
Largest Win: 4650
Smallest Win: 0
Largest Loss: -750
Smallest Loss: -20
Winner size (mean) 1786
Loss size (mean) -329
Median Win 1266.9
Median Loss -296
Total Wins: 39310.05
Total Losses: -5911.2
Overall P/L: 6.650096427

Scheme 4 (all of 2005):
ALL TRADES: 34968
Number of trades: 58
Number of winners: 14
Number of b/e: 23
Number of losers: 21
Percent winners and b/e: 63
Percent b/e: 39
Largest Win: 5625
Smallest Win: 762.5
Largest Loss: -750
Smallest Loss: -10
Winner size (mean) 3060
Loss size (mean) -289
Median Win 2987.5
Median Loss -290
Total Wins: 42851
Total Losses: -6058.7
Overall P/L: 7.072639345

================================================== =
Discussion:

The P/L is more a reflection of how risk is kept small than of absolute profit. Compare Schemes 2 and 3 with approximately the same Profit but different P/L.

Scheme 4, the MTP algoritm for trade management, runs the best score for both P/L and absolute profit. As mentioned in the original report, this reflects the fact that no limits are held on the profits whereas the risk is clearly defined. This optimizes the P/L. Trading in this way is a game of strategy and position management.

Position sizing was not effected. It is probable that position sizing could vastly influence the results towards larger profits. That remains to be tested. I will send the spreadsheet to Matt Bowen and it is freely available to anyone who wants to examine it. There may be errors in the spreadsheet but I went over the trades very carefully. Some trades were taken in my account, but not all, so some are paper trades.

Finally, I have no financial interests whatsoever in MTPredictor. I am just a happy customer and glad that I have now this tool for detecting potential low-risk setups in my trading.

Good luck to all and happy reading.

Philippe

[Matt Bowen]

Hi Philippe,

Well done my friend... 350% return in one year works for me. The funny thing is that you have shot at making 400% if these open positions keep on rolling.

The KC-Wheat trade had me for moving my stop to breakeven, I had 6 contracts in the portfolio.
I totally forgot about that trade, as soon as I sell'em I quit looking at them. In any case, I hope that trade goes to "MAX WAVE 3" at around 463... that would really cap off the year for you. :)

As for the other open positions in Gold, Silver and Live Cattle I think we are all watching these. I would be very interested to see where the numbers stand once these trades are closed out. I'm just glad you were able to have a great year trading with MTPredictor. Good for you...Great trading.

Here is the Excel report with the trade results:

http://www.mtptrader.com/MTPlog2.xls

Philippe thanks for taking the time to post and record this information, I know exactly how much time this takes... A FULL YEAR of watching and waiting.

All the best,

-Matt

[marcus]

Regarding System 4 simulations:
What really means Target Zone? The 2-3x "Blue Zone"?
If is this, then when trail the SL ( from the current b/e level)? Maybe at the first close bar inside of the Blue Zone????
Rgds,
Marcus

[Matt Bowen]

Hi Marcus,

Philippe posted all of his rules back in August of 2005. You can read the original thread here:

http://www.mtptrader.com/showthread.php?t=297

The post were followed-up with some very interesting questions and discussions.

All the best,

-Matt

[marcus]

I corrected the .xls file of Phil!
Is full of errors and eroneous conclusion as well!
I decided to post it here!
finally i added the MDD analisys using the monteCarlo Method!
General conclusion:
As I saw here on Forum, none managed to have more than 45% of winnings and more than 3x as ProfitFactor! It looks like this is a limit of the method!
This lead ( see the final conclusion) to: about -30RU as MaxDrawDown, confidence greater than 99.99%; Samples: 10000 analyzed, and 1000 trades.
In turn, please, have a minute and answer to my question I posted here without any replay:
Does MTP works well also for longer than 1Day time frames: 2Days and 3Days?
All of us know that works on 1Week( 5Days), as we saw the images posted here.
What about these less talked about time frames: 2D and 3D?
Thanks in advance,
Marcus

[Steve Griffiths]

Hi Philippe

Well done on these results, they are very very good and show how you can make some very good money by focusing on Risk/Reward and not worring about the % of profitable trades.

Again thank you for sharing these brilliant results with all of us here :)

Thanks

Steve

[Matt Bowen]

Hi Marcus,

I corrected the .xls file of Phil!
Is full of errors and eroneous conclusion as well!

First off, you said the file from Philippe is full of errors...based on what? Judgmental heuristics? Give me some examples...rather than just grinding your axe here. Philippe told you he was not using any position sizing in this test, this makes it easy for new people to understand and follow along. It is possible that there are errors in the spreadsheet, we are not infallible. To say that the .xls is full of errors, is preposterous.

Look, I don't get all twisted when some blowhard comes in here and tells me that he can't make money on a 45% winning system. Obviously that person doesn't understand money management. I've given plenty post and proof of what works...people just have to take the time to learn it. Here are a few examples:

http://www.mtptrader.com/Van1.pdf

http://www.mtptrader.com/showthread.php?t=130

http://www.mtptrader.com/showpost.php?p=115&postcount=1

http://www.mtptrader.com/showpost.php?p=507&postcount=8


General conclusion:
As I saw here on Forum, none managed to have more than 45% of winnings and more than 3x as ProfitFactor! It looks like this is a limit of the method!

One thing I love about this business is that I can always tell how long someone has been trading by the questions they ask or the statements they make... yours is no exception. You obviously have not been around the management industry or professional traders because if you did you would not have made the comment " none managed to have more than 45% of winnings ". Anybody that's been in this business (long enough) knows that getting a win ratio over 75% is BS and most of the vendors in this business will tell you that you can do this with their product...that's their opinion, but have they furnished you with P/L statements from their brokerage account to back up their claims? No, you know why? Because they can't...Most vendors don't even trade, so how the hell do they even know what's possible? I've worked with many of these vendors and they pull these numbers out of their @$$ and use them as a basis to suck clients in on ridiculous returns posted in their advertisements...Do you know why? Because they are in the business of selling you software, they don't give a damn whether or not you make money. Why do you think people continue to buy software after they have just bought a 80% winning system? Because it doesn't work. I've got plenty of them sitting on my bookcases. I even kept the ad's for many of them, if they spent half as much time on the ads as they did on the system they might actually be worth something.

It's just like the full service brokerage business, (most, not all) don't care if you make money...they just want your account activity, why? Because that's the only way they make money. Most of what you see and hear in this business is at the expense of the little guy, the private trader. At MTPredictor we take a different stand, we are here to educate people on the realities of trading. If they choose to buy the 80% winning trading system, they will be back (if they have any money left).

Best regards,

-Matt

[marcus]

Hi everybody!
I have to apologize with Philippe and Matt first of all for my "heavy words" that are far away of what I really meant! A circumstance could be the fact that I'm not american, nor English!
However, attached you'll find both the two files : original and corrected. What i meant is that essentially , the 4 systems are equivalents because all of them have about the same P.Factor! Also about the same %winns setups!
See please the corrected file!
What I dare to ask very kindly Philippe is to correct again my filein order to show to all of us the winns looses as Risk Units, not as US$!!! It is more easier in order to apply the fixed percent risk money management techniques!!!
Matt, could you help me as me to be able to correct the Phil's file in this manner???I mean to report ALL the results in terms of RU, but not US$!!!
Finally:
I'm really not a trader, but I enjoy the mathematics and moreover the statistics ( also the game theory , a branch of mathematics)!
I think the trading process is not a random game! the rules of statistic theory should govern also here. Otherwise, it would be a zero sum game!!! But it isn't! It's up to each trader when convalidates its own trading system to follow or not the basic statistic rules giving him a valuable information upon how large should be the MaxDrawDown! Taking account on ALL the parameters descibing a system! I mean: %Winns, Av.W/Avg.L, R.Unit ( as % f the current Equity, and so on!)
A good system will be not valuate in a manner like this : " Look at my last week/month/ even year results!! how nice are them!!!" As stable in long time in the past are these parameters, as robust is his system!

This is my hobby: Evaluating various systems using the statistical methods!
Yours is trading! But I guess a successfull trader must be aware upon what means the ststistic of the historical backtesting of his system!
I appreciate the intelligence of all of you ( the MTP Team) but also yours clients. My goal is not to give you advises! None of you asked me this!
My goal is to learn from your trading experience and to built my own system using also your experience!
In turn, if some of you wants to teach some more of what means the whole characterizing of a trading system, I'm fully pleasant to help anyone!
Regards,
Marcus
P.S. Please, Matt , help me to modify the Phil's corrected system attached here in order to express the gains, losses as Risk Units!

[Steve Griffiths]

Hi Markus,

Thanks for your appology.

As you say, you are not a trader nor are you even considering purchasing or using MTPredictor. As such, you have no idea what is involved in trading, nor any idea about the techniques used by the MTPredictor software, so I cannot see why you wish to continue psoting on this bulletin board on this topic.

As such may I please suggest that this thread is now closed and we move on.

Thanks

Steve