MONTE CARLO ANALYSIS

The trading strategy employed has been run through thousands of Monte Carlo simulations to identify the duration of potential drawdown's and affirm the general behaviour of the trading strategy in regards to equity growth for a given 4 week period. This is based on the following parameters

  • Starting equity: 5000

  • Win probability: 50% - 60%

  • Win: Loss ratio: 2:1 - 3:1

  • Number of trades = 120 (number of trades per month)

  • Risk per trade = 2%


The above are just 9 of over 500 equity curves generated from the parameters provided above. Whilst there is variation amongst the equity curves in regards to periods of growth and consolidation the underlining theme is that in all cases the equity after 120 trades has an upward trend motion affirming the positive expectancy attribute of the system. The analysis shows that from a starting bank of 5000 I should be able to grow the account to over 14,000 after 120 trades (4 weeks worth of trades).

Its important to note here that I have come across trading systems from highly ranked football trading system providers where they provide equity curves showing how to grow an account of 5000 to over 10,000 over a 12 month period. Yet the Scientia system provides double digit equity growth within a single month and in some cases within a single week.

 


The key to success in trading is the ability to accept losing a battle whilst knowing you are winning the war

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