Formed in 2010*, we have developed our own proprietary software to thoroughly test and analyze various trading setups and determine what the actual results would be if you consistently followed these trading systems.
Most authors are long on explaining the theories of their trading systems and short on their actual results. In most books or articles you might be told of one or two examples of how a trading setup worked on “Microsoft in 1999″ or “American Express in 2012″ – and both come complete with well illustrated charts showing you how nicely their system worked in those specific instances. We all have seen these charts.
What you never get are the hard core facts like – “Tested across the individual members of the S&P500 from 2000 to 2010, this trade worked xx.x% of the time and based on a risk size of $500.00 per trade (see THE MOST IMPORTANT ELEMENT IN SUCCESSFUL TRADING), the average winning trade made $xxx.xx and the average losing trade lost -$xxx.xx. This is the kind of information you really need to have in order to decide whether you want to really use a trading sytem. And there is other information you need to know as well, like how many opportunities are you going to have to trade this system each year, largest drawdown for the test period, returns by year and much more.
Of course they will all tell you their system won’t work every time, but without real data, you are still left assuming that it will work more often than it doesn’t, and that you will make more money than you lose – otherwise why would they write about it! How would you really know – it always sounds so good.
So now you understand the information we were after when we began developing our testing system. As we continued to test trading setups and evaluate them for use, we started to develop our own set of rules to follow on what makes a good systems trader. Thus this website and trading school blog were born. Inside the trading school you will find discussions on general trading setups, trading techniques, the rules a systems trader should follow and much much more.
So welcome to TradeProbability.com and we hope, at a minimum, that you find some interesting reading.