The higher the score for the Open Strategy and Close Strategy Attributes (Os/Cs), the better the trader’s decisions to enter / exit the market.
Open / Close Strategy Charts (Os/Cs)
It´s impossible to rule out luck entirely. Any data sample contains random statistical illusions - extremely good or bad data points.
But: our analysis is designed to tell those trading for systematic profit from lucky punters. It rules out luck at higher confidence than traditional analysis. How? By looking beyond return (the what? answer) and looking for how? Returns were obtained - and using all available information.
Take trade timing: a trader who can really predict the market ought to open and close trades at the best possible time! If you really had talent akin to a crystal ball, wouldn´t you time trade open/close other than at local minima/maxima?
What's in it?
The chart tracks trade timing, showing, on a trade by trade sequence
- on trade open: does the chosen trade open point beat opening that same trade slightly earlier or later?
- on trade close: idem, for close decisions
The chart ranks the strategy´s return, alongside hypothetical cumulative returns by 10 strategies opening/closing the same trades, slightly earlier/later, on an x% (± 10%, 20%, 30%, 40%, 50%) systematic basis.
For each trade open/close, the chart ranks 11 outcomes (in black the original one, and the 10 hypothetical alternatives) on a cumulative basis (on the y axis), taking into account all trades accrued up to each point in the sequence (plotted on the x axis).
What´s the point?
A strategy that yields Performance, optimally timing trade open / close, is likely better than a strategy with comparable performance through inferior timing.
Optimized strategies muster upward trends - they build up their lead over inferior timing choices, trade by trade.
Strategies trending towards the Chart middle are worrisome - their trade open/close timing is no better than random, which means their performance could be statistical illusion (luck!).
We weigh recent timing more than distant one: the Chart can be filtered to plot the last 12, 6, 3 and last D-Period, up to a maximum of 12 D-Periods. This way you can see both recent and long term developments in timing quality.