DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: bajasurf who wrote (2610)	8/10/1999 8:17:00 AM
From: TraderAlan	Read Replies (1) of 18137

baja, Every successful trader knows that the best backtesting system in existence is to look at his/her P&L at the end of the year. If you've you've significantly beaten the market, your system worked! Frankly, I find trying to jam my discretionary trading into a pretty box with a pink ribbon on it (so I can turn this all into a simple right brain math exercise) a waste of my time that appeals only to self-doubt. Instead, I maintain accurate statistics of my trades that measure my wins and losses, how much I place at risk, how long I hold and the general opportunity-cost equation. This keeps me much more honest and provides better feedback than trying to treat trading as a blackjack game. If backtesting helps you, do it. But don't assume it's the one true path. You also assume the way someone trades stays constant over time. I am shifting my strategies EVERY DAY to compensate for changes in the market environment. For example, about 80% of my trades the last few weeks were short sales. I didn't do any short sales Jan through July. Doesn't take a rocket scientist to see why that little shift occurred. Alan

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