Disclaimer: The information found on this site is meant for educational and informational purposes only. Nothing on this site should be construed as a recommendation or solicitation to buy or sell derivatives or securities or to trade any particular strategy. Trading of derivatives or securities has large potential risk and you must be aware of and accept all the risks. Past performance of any trading system or methodology is not necessarily indicative of future results. No representation is being made that any account will or is likely to achieve performance results similar to those discussed on this website. Hypothetical or simulated performance results have certain limitations and do not represent actual trading.
Saturday, January 28, 2012
One of the biggest unknown factors with any trading system is human judgement and intervention. Where I thought I was being prudent to take profits earlier on 2 trades, I ended up instead just reducing the performance of my system by greater than 5%. Nevertheless, these are the benefits of trading a strategy on a live account. There are so many other factors that are outside of a controlled simulation.
Furthermore, the loss on the second trade of 11.3% was quite significant but not entirely alarming. Performance results from simulation from September to November of 2011 was uncharacteristically high and volatile. Also, the average days a trade lasted was 8 during simulation, but so far, it has been 18 days.