Starting Too Wide is a Mistake

There is such a thing as starting with too many trades.

When traders start using the Strategy Cruncher with MabeKit, they sometimes go overboard by using a starting point for a strategy that is too wide.

You can understand the thought process - just make your initial criteria REALLY wide - with no assumptions - and let the Cruncher tell you what's important.

The problem with this approach is that loosening the criteria weakens your signal.

And the signal is the real impetus for the trade.

Make your signal too weak, and you don't have a signal at all.

So your starting point has way too much noise.

A good way to check this is to review the charts from your starting point.

And it usually doesn't take going through thousands of charts to see how strong or weak the signal is.

Systematic traders often get too comfortable immersed in the data, ignoring the lessons you can learn from doing chart reviews.

You don't have to become a discretionary trader to learn from charts.

Make it a habit to routinely review charts from your backtests (Amibroker makes this easy).

You'll almost always learn something that a spreadsheet alone is hiding from you.

-Dave

P.S. Are you struggling with writing AFL code for backtests in Amibroker? Generate working backtests automatically in seconds with MabeKit. Here's a video showing how this works.