Your 9% example would be true if the series of 9% profit trades
were purely random. If, however, the market had changed and a
9% TP consistently (say over several months) provided better
returns, then it would be a wise choice to change the system to a
9% TP. My assumption is that some market changes aren't day
to day random, but persist over several months. One way to
test this hypothesis with with walk forward optimization.
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Vimal, Your 9% example would be
Improved GDX swing system and statistics
Posted by algyros on 29th of Jul 2010 at 08:46 am
Vimal,
Your 9% example would be true if the series of 9% profit trades were purely random. If, however, the market had changed and a 9% TP consistently (say over several months) provided better returns, then it would be a wise choice to change the system to a 9% TP. My assumption is that some market changes aren't day to day random, but persist over several months. One way to test this hypothesis with with walk forward optimization.