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What I wanted to point out was that if you have a method with set rules then it's very easy to calculate expectancy and you could also make it much more advanced than that formula you menchioned, but that's not the point. The hard part when you are trading discretionary is to quantify your method - especially if you are using multiple tools that needs to be read with discretion
But there is value in keeping track of what you are actually doing, which is what the "expectancy" statistic is for: it tells you what you have been doing. If you trade consistently, it may tell you what you can expect over a period of time if you trade the same way. But it's more a scorecard than anything else. That's my only point; we don't really disagree here, I think.
For me, it took getting absolutely obliterated time and time again trading by the seat of my pants. I knew I had an idea but I wasn't executing it because too much was getting in the way (mostly my own emotions). So I set out to learn how to program my ideas to try and take the emotion completely out of it. It took awhile and honestly it's a never ending journey to tweak and test but it has helped me so much.
Now when I have an idea for a trading strategy I can think about it, build it and test it for as long as I think it needs to be tested. Back test, forward test, optimization on different time frames, etc. Then, assuming it looks decent I can let it loose on sim and test some more. By the time I trade real money I have confidence in the system and I know the computer doesn't get scared and it ALWAYS cuts losses when they need to be cut.
Trading: The one I'm creating in the present....Index Futures mini/micro, ZF
Posts: 2,311 since Nov 2011
Thanks Given: 7,341
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This is how my screens look most of the time....
Excel is an important part for me to understand the instruments behavior. For example, on a weekly basis from December 2007 to present ES breaks the Monday high 76% of the time.
Ron
...My calamity is My providence, outwardly it is fire and vengeance, but inwardly it is light and mercy...
The steed of this Valley is pain; and if there be no pain this journey will never end.
Buy Low And Sell High (read left to right or right to left....lol)