This is by far my most favorite trading tool and I am pleased to share it with you. It provides empirical proof that profitable trading is not solely dependent on a high winning percentage. This tool is one of the features included with the desktop software that comes with my swing trading course. Try it out, I am sure you will agree it is an eye opener.
How to use this tool.
1. Enter the values for Win/Loss ratio and Win Probability (3.0 would be a 3 to 1 win/loss ratio and .50 would be a 50% win probability)
2. Enter desired “Lines Qty” to draw multiple equity curves
3. Click the “Generate” button to generate simulated equity curves
Getting Java errors?…checkout this video to remedy…
Frequently Asked QuestionsWhat does this tool show? This tool simulates an equity curve of your account over the long term after systematically applying known parameters of Win Probability and Win/Loss ratio of trading results. Each equity curve consists of about 385 trades which is a statistically significant sample. The random generator decides (as the market does) with a given probability whether you win or lose in a given trade. The equity curve trajectory is then generated. 100 is the starting point so any lines above that are profitable. What is a “Win/Loss ratio” parameter? What is a “Win Prob” parameter? What is a “Lines Qty” parameter? What are the “Kelly Val” and “Math Expect”parameters? |