System Trading Blog

Make Your Money Work Harder

To risk 150 pips for a “sure gain” of 1?

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I test run a portfolio or several systems. Every system is included in the portfolio because of presumably good risk/reward ratio.

Today in the test account there were 5 “ugly” trades from 2 system providers. All trades profitable. The catch is that the profit was 1-6 pips per trade, but at some point the trades were in deep loss [130+ pips] before they were closed. Some of the long trades were done while market was in the middle of steep decline. Basically, idea is to buy whenever and hold until the position turns profitable.

Undoubtly, this is good way to produce smooth performance curve on zulutrade (zulutrade doesn’t record intraday moves, but logs performance data on trade-close basis), but it is very risky trading strategy.

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Written by A.S.

December 7, 2009 at 11:30 pm

Posted in Uncategorized

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