The Test – Blueprint 4-7-2013
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About Jeff White
Jeff White started trading in 1998 and resides in the Dallas/Ft. Worth area with his wife and two sons. Twitter / Google+ / Facebook / StockTwits
jeff
I wonder…..you’re about 50%. Meaning about half your ideas work out. Have you ever logged results based on specific trading patterns. Aren’t some producing better than others (statistically)?
Thanks
John
Hi John,
This is a great question and yes you’re right…my accuracy isn’t going to impress anyone. Thank goodness that profitable trading doesn’t require that!
It seems like compiling stats on particular patterns would yield some insights, but quite honestly they are so dependent upon market conditions that the data itself wouldn’t reveal enough of value to place any weight on it. So to answer your question, I have not compiled stats to that effect.
For example, take a bull flag. In a strong market, those will work better than in a range-bound market. How would you account for that in the stats, as the general conditions carry considerable weight in how well a pattern like that will play out on average?
I just have found that experience helps a trader understand when to start applying different patterns due to more frequent failures of recent trades. Something is usually working (although there are occasions when we’re truly directionless). It’s a matter of finding out what is working and how to locate those plays and structure them accordingly, so I think the science of data still would have to go hand-in-hand with the art of adaptation.