|Recent Performance Results1
Performance Results: Jan. 2, 2015 — Apr. 15, 2015
HINTS & TIPS: How To Assess Trading System Performance:
1. Profit factor and percent profitable are the two most important performance metrics.
(Hint: a profit factor > 1.4 and percent profitable > 60% is outstanding for a swing trading system)
2. Always try to obtain out-of-sample performance, i.e., trading signals given in advance.
(Hint: backtesting should be met with skepticism as results can be optimized with the benefit of hindsight )
3. Simulated trades should always be at the market open or close without stop or limit orders on entry or exit.
(Hint: stops/limits can be tweaked to yield optimal results but not be representative of real-world trading)
4. Trading systems that work well on multiple stocks are more robust than those optimized for a single stock.
(Hint: a trading system optimized for a single security is more likely to fail under unseen market conditions)
5. Performance results should disclose all trading signals; spanning multiple timeframes and market conditions.
(Hint: it's easy to "cherry pick" performance by not showing all trades or only showing favorable timeframes)
1 Results are hypothetical. Trades are simulated at the next-day opening bell price, after the trading signal.