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Key elements for a good solid trading strategy

These are the prerequisites Franck Draheim, our strategies designer, demands from each of one of them to qualify for our mutualized automatic trading system:

1Over 12 years back tests over as many market conditions as possible.

2Make sure to be as close as possible to a positive return every year since 2004.

3Tradestation adjusted profit proof results: we cut the achieved results of each algorithm by substracting from the winning trades their square root, and incrementing losses by their their square root also. Most systems will break down on such a harsh formula testing. We make sure the resutling «adjusted profit» keeps very strong in order to validate an algorithm.

4A fair balance between long and short entries based upon market patterns recognition.

5Each trade has to return a substantial average gain, in order to sustain execution fees or possible slippage, unlike scalping programs that may look good, but often result in overexecution and destroying the profits.

6We do not use MACD, Stochastics, RSI, nor any indicators that can be optimized according to the moment. All our strategies are price driven. That implies our algorithms are immediately ready whenever there is a new contract roll out. This is where most systems may break down and show a discrepancy between theory and actual execution.

7All tradestation backtests are provided with the “Look-Inside-Bar Backtest” flag enabled and based on 1-min bars in order to give you the most reliable and coherent backtest results possible.