V.7:12 (458-459): How to evaluate a commodity trading system by Kent Calhoun

V.7:12 (458-459): How to evaluate a commodity trading system by Kent Calhoun
Item# \V07\C12\HOWTOEV.PDF
Availability: In Stock

Product Description

How to evaluate a commodity trading system by Kent Calhoun

The percentage of profitable trades, the average profitable trade, the average losing trade, the maximum consecutive losing trades, the average profit per closed trade, the largest winning and losing trades, the number of profitable buys and sells, the average number of days in losing and winning trades, and the equity return on margin are not what I use to determine whether a commodity trading system can be traded.

Just because a system "makes" money doesn't guarantee you will make money. I tested 60 systems that "made" more than $ 1 million after commissions and slippage over six years, but discovered that 47 lost the $100,000 beginning equity at some time during the six-year trading period.

Maximum equity drawdown determines the "tradability" of a commodity system, not profits.

System developers initially defined maximum equity drawdown as the worst amount of equity drawdown (i. e., reduction of the equity in your account) on a close-to-close basis. Eventually, an intraday maximum equity drawdown came to be used. This gave a more realistic worst-case scenario. I'd say neither of these maximum equity drawdown figures is adequate.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order