![]()
Last time we talked about Risk, which is the first and most important aspect of a trading system. We discussed how limiting risk can create higher absolute returns because of reinvestment, raising capital, and using leverage.
Now we can talk about our second focus: Returns. There are three types of returns that we need to understand. First is the back tested returns. An automated system should generate back tested returns. These returns should cover different market conditions and include enough data points to be relevant.
The second type of returns to track in automated systems is simulated returns. These are accumulated
Read more [...]