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Forex Software → Forex Strategies → Key points for 'good' strategy?

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1 Topic by angat (edited by angat 2012-10-24 14:49:24)

  • Registered: 2012-10-08
  • Posts: 84

Topic: Key points for 'good' strategy?

A good strategy...

...should be resillient enough to work with any amount of data.
...should not have a larger drawdown than 10-15%.
...should use one or more indicators for entry/exit.
...should have permanent stop loss and target profit as backup only.
...should have a win-loss ratio of at least 0.75.
...should have more potential reward than risk per trade.
...may work on several currency pairs.
...may work on different timeframes.


What are your key points for a 'good strategy'?

  • togr
  • Licensed Member
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  • Registered: 2011-03-22
  • Posts: 264

Re: Key points for 'good' strategy?

angat wrote:

A good strategy...

...should be resillient enough to work with any amount of data.
...should not have a larger drawdown than 10-15%.
...should use one or more indicators for entry/exit.
...should have permanent stop loss and target profit as backup only.
...should have a win-loss ratio of at least 0.75.
...should have more potential reward than risk per trade.
...may work on several currency pairs.
...may work on different timeframes.


What are your key points for a 'good strategy'?

Mu 5 centsI would use this criteria:
1. Low drawdawn max 10%
2. Good profitability - it produce pips as well as $$$
3. It has a lot of trades - it is much easier to fwd test it when you have 1000 trades vs 10.
4. Majority of trades are in profit. Be aware of low TP and high SL combination. This can produce a lot of profitable trades but overall profit could be negative. See #2
5. Simplicity - no combination of 8 opening/closing conditions. Clear rules for exit and enter.
6. I would not say it need to run on other TF or pair. I have such strategies and they do not perform better than single TF/pair strategies.
7. Create strategy on small number of bars - 10,000. But backtest and optimize it on as high as possible like 720K wink Different date/year periods.
8. Don't be impatient. Don't be greedy. I learnt this the hard way so i hope you could use any of these 'recommendations your good

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