Wednesday, 25 March 2015

Trading System...

To prove a stats based betting system I would normally want 2000 bets and a good volume of action (otherwise you'd be testing for years!). It's 'upsetting' to see people using or buying a system after only a hundred bets or so - just because they have seen good profits during that period. Standard deviation will generally make fools of them and the system.

I have been working on a small side project - a 'trading system' - very selective but it is interesting and I think that even with only two and a half weeks of trading it will be profitable. I will have to take it through the summer but I don't see how the results could fundamentally change.

So how can I be more sure of my trading system after less than a 100 trades than a stats based betting system after 1000 bets? Simply because my system relies on my 'actions' - trading 'in' and then 'out' of a position. As a trader you are in control and acting on what you are seeing on the screen. On a 'bet and forget' system you have no control, although there are other benefits of course, such as taking the 'emotion' out of the equation or saving a lot of time because often you can place your bets in advance of a race - at BSP for example.

The first few results are below.

Trade No.53 was an error, one that I am unlikely to repeat - but it has to go into the P/L, after all an errant click of the mouse can happen and next time it could go in my favour.

The profit figures are to 1 pt. or £1.00 trades if you like. I prefer to use 'minimum units' to show P&L as it strips away all the nonsense. ("We made 10,000 points of £10,000 stakes!").

The strike rate is high and there is no reason for the individual losing trades to be any bigger than the individual winning trades - except perhaps for two or three times a month when you might suffer a loss of your whole 1 pt. / trading stake. Also, you are not reliant on getting in at the best possible price, this isn't about scalping or trying to steal a few ticks, it's about large / solid movement.

So far it has yielded 8.25 points of profit. The great thing is that at this stage of the market there is reasonable liquidity and so trading stakes can be in the hundreds and probably thousands.

As there are so few trades, maybe I will use it for my retirement one day! Succeed or fail, I will try and remember to report back in a few months on how it's going.

It would be great if it works. No in-depth knowledge of horse racing is required. I found this by investing a little time - nothing more. If I came up with this - then most people reading this blog could too.

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