November 2nd, 2016

A Tradable Plan - Part I

This new HTML file is another step in this series of articles. Refer to preceding articles starting with the Payoff Matrix to gain a better understanding of what is being put forward in this two part installment.

Any automated stock trading strategy can be resumed by 3 of its performance metrics. Namely, the number of trades, average bet size, and net profit margin per trade (n, u, PT). Everything else is of lesser consequence, part of features, preferences, or descriptive properties.

If those 3 numbers totally explain a strategy's final result, then that is where one should put his/her efforts when designing, or modifying a trading strategy.

One only needs to concentrate on how can a strategy make more trades, increase its trading unit size, and increase the average profit margin. Not just on one trade, but on the thousands and thousands of trades an automated trading program can make over its lifetime.

This can be done using a variety of approaches and trading techniques. Or, one could transform, modify existing strategies with for sole intent to increase any of those 3 numbers, or all three, thereby increasing overall return. Three numbers, two of which, you set yourself.

The following HTML file is more explicit:

HTML file:  A Tradable Plan - Part I

 

This series of articles is more than just an exploration on doing things differently. In trading, nothing is set in stone, objectives change, methods of doing things can change too.

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Related articles part of this series, as they were written:

The Payoff Matrix 
The Game Inside
Strategy Design Defects 
Strategy Enhancers 
Trade Detection 
Stock Trading Decisions
Prediction Dilemma
Extracting Tradable Information
Portfolio Core Position 


November 2nd, 2016 © Guy R. Fleury. All rights reserved.   

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