Topic: breaking 80/20 rule can help find SSS Strategies

Hello pop 80-20 rule is considered a rule of thumb in the world  this means that  80% of profits come from 20% of customers , or from 20% of actions .... etc  in other words the max gain in life come from the smallest no of actions we do 


BUT  if we incorporate the anti 80/20 rule as a filter i think it will add a lot to the quality of our strategies , its simply insure that the profits spread ed equally as much as possible from all trades

so for example :  if we have a filter that reject strategy where 40% of profits  come from 10% of winning  trades  '' the same rule apply for losses as well''.

Another application for the same concept ( another filter ) its function to insure that trades are well distributed over the time so we can filter strategies that stay inactive for long time

I think the two filters together

distribution of profits over trades  & distribution of trades over time   can bring Strong, Secure AND Stable Strategies over the time

Re: breaking 80/20 rule can help find SSS Strategies

Is it a criteria for the generator? If so, maybe Adam can incorporate it into his custom sorting. Like a Theil index for example.

Re: breaking 80/20 rule can help find SSS Strategies

Can we not control this by using take profit and controlling the number of trades?

My 'secret' goal is to push EA Studio until I can net 3000 pips per day....

Re: breaking 80/20 rule can help find SSS Strategies

footon wrote:

Is it a criteria for the generator? If so, maybe Adam can incorporate it into his custom sorting. Like a Theil index for example.


Yes it is a criteria for generator i wish to see it in the criteria window plus sorting as well

Re: breaking 80/20 rule can help find SSS Strategies

Blaiserboy wrote:

Can we not control this by using take profit and controlling the number of trades?

the idea is the stability of strategy always overlooked and it is one of main reasons that traders get losses

Lets say you have a business gives you a high returns '' high profitable strategy which FSB can find '' but that business generate that huge profit from smaller number of transactions and the rest of transactions gives you a very small profits  and lets say you missed one or two of the highly profitable transactions for any reason !!  this will dramatically damage the profits of your business  Right?! 

And if we have a business with transactions more or less give the same expected returns '' the profits well distributed allover your transactions  !!  this is what i mean by stability  so if we have filter in criteria window & sorting  this will gives us high return , stable expected returns strategies

Re: breaking 80/20 rule can help find SSS Strategies

And Regarding to apply the same concept using time Vs trades also important specially for dynamic traders who like to stay trading most of time .  some strategies''profitable ones ''  shows a big gaps in their history '' gaps means long time without trades''  this means that the trades also not well distributed allover the time 


So by find a strategy with a well distributed trades/time  it will add to the stability of strategy

Re: breaking 80/20 rule can help find SSS Strategies

strategy 1

Its Stable , predictable returns and safe to follow '' the flactuations between points minimum , no time gaps

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Re: breaking 80/20 rule can help find SSS Strategies

strategy 2

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Re: breaking 80/20 rule can help find SSS Strategies

strategy 3 this strategy is double other three strategies in points  BUT in my opinion seams ugly , risky , unpredictable returns , frustrating strategy

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Re: breaking 80/20 rule can help find SSS Strategies

strategy 4  the ideal one all profits ''in pips or points'' are equal

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Re: breaking 80/20 rule can help find SSS Strategies

The idea looks like squeezed bell shape curve from top this will lead to the lower parts of the bell curve to be increased ''  its a modified bell shape of profits , trades distribution

And the ultimate shape of the squeezed bell shape will be strategy No 4

Re: breaking 80/20 rule can help find SSS Strategies

one trade profit can block finding many successful strategies !!!

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Re: breaking 80/20 rule can help find SSS Strategies

two winning trades > 40% of all profits sum  (total winning trades =27 )

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Re: breaking 80/20 rule can help find SSS Strategies

Profit distribution curve to be platykurtic '' as flat as possible'' , and when flatness increase  , it means more stable and less risky

Re: breaking 80/20 rule can help find SSS Strategies

ahmedalhoseny wrote:

one trade profit can block finding many successful strategies !!!

With the older version we did not have adequate control of the exits, ie take profit and stop loss.. so we could not prevent those big trades by limiting the size.

Much different now.

My 'secret' goal is to push EA Studio until I can net 3000 pips per day....

Re: breaking 80/20 rule can help find SSS Strategies

Blaiserboy wrote:
ahmedalhoseny wrote:

one trade profit can block finding many successful strategies !!!

With the older version we did not have adequate control of the exits, ie take profit and stop loss.. so we could not prevent those big trades by limiting the size.

Much different now.

I think Adding one option may help in that issue

The option is : remove the top N% trades in points '' from the profitable group'' .

This small option may help in more than one point according where the option is added

1- If it added to criteria it will help to remove outliers from the winners side '' small no. of trades with a huge profit''

2- If added to the Strategy- recalculate strategy Tab it could gives us a comparison between the actual and modified one




NOTE : I think The Strategy..Recalculate strategy can be more powerful if we added a What-if analysis to it so we can obtain a different scenarios according to the new conditions , when i think about the new conditions i think about a trader behavior/lifestyle  :

What if : canceled all Fridays or mondays  trades from strategy and recalculate it
What if :canceld the fridays of NFP report
What if : removing the top5% of winners trades
What if :changed the fixed lot size to 1% .2% ,.....
what if : changed the Strategy properties section adding , reducing closing ,.....etc
........etc