Tweak Your Settings
As a trader, the variables you should focus on depend on your risk tolerance, trading style, and overall strategy. However, here are some key variables that are generally important for traders of all styles:
- 1.Net Profit: This represents the total amount of money you've made after deducting trading costs and losses. This is the most straightforward way to measure your trading success.
- 2.Return on Investment (ROI): This represents the percentage return on your investment. It is calculated by dividing your net profit by the total amount of money you have invested. A high ROI indicates that your strategy is generating strong returns relative to the amount of capital you have invested.
- 3.Profit Factor: This is the ratio of your gross profits to your gross losses. A profit factor greater than 1 indicates that your strategy is profitable.
- 4.APPT (Average Profit per Trade): This represents the average profit per trade. A high APPT means that your strategy is generating strong profits on average.
- 5.Expectancy: This measures the average amount of money you can expect to win or lose per trade. A positive expectancy indicates that your strategy is profitable.
- 6.Max Drawdown: This represents the maximum amount of money you've lost at any point in your trading history. It is important to keep this number as low as possible, as a high drawdown can not only wipe out your account and make it difficult to recover, but if you can't stomach the losses then you will likely stop using the strategy before it can succeed. So make sure to ask yourself if you are comfortable losing x amount of money.
- 7.Max Drawdown Duration: This represents the length of time it took to recover from your maximum drawdown. The shorter this period, the better, as it means you can get back to profitability faster. If this number is big, just ask yourself if you are willing to wait that amount of time before reaching a new high in your strategy, if not, tweak it until you are.
- 8.Total Trades: The Total Trades metric counts all the closed trades that occurred, excluding open positions. It's a crucial figure that determines the reliability of your strategy. If the number of trades is less than 100, it might not provide dependable results since there aren't enough samples in your test set.
- 9.Backtest Time: This metric indicates the total time your strategy has run within the backtest range, including filters. If you haven't used any particular day or session filters, this should be the same as the backtest range. This metric is significant because it informs you of the duration you will need to run your strategy before anticipating similar results to your backtest.
When working with the PSStrategyX, you will want to pay attention to these variables (shown on the strategy summary) as you change the settings across your signal generator and inside PSStrategyX.
Ultimately, it is important to remember that trading is not a get-rich-quick scheme and that there are no guarantees of success. It is important to develop a sound trading strategy and focus on risk management to minimize losses and maximize profits.