1.Performance and pips evaluation
In actual contest rules is setup of these parameters clear. But there is a small chance how to get better evaluation in contest and don’t risk too much. In trading contest you can follow global market trend and minimize risk from drawdown when you trade just very small lot size and then you simply waiting for hundreds of pips. If you right, then you can get first place in pips expert category without risk in few days and then you can concentrate to build performance with small targets and huge lot size. Problem in contest is, that you can be wrong many times in beginning and you have still chance to be trader with best evaluation in contest. Problem in real trading is, that investors who subscribe signals are not interested about contest, his expectations are different. Risk of thousands pips in beginning of the month is bad solution for them because they set up lot size of trades as same value for every trade.
Solution: In my opinion is better to set up evaluation based on relation between lot size and pips from position (negative and positive as well). Example
Every single trade can multiply by multiplicator depends of volume of every single trade. If I will reach target on position 100 pips with volume of 5 million then result for pip evaluation will be 5*100 = 500 points . If I will reach 100 pips with volume 0,01 million then I will get just 0,01*100= 1 point. I recommend set up this rule strictly only for contests evaluation. In statistics investor have to see real amount of pips gain per month. Because most of them will follow trades by constant lot size. So pips point is more important for them. But contest evaluation will be fair. So 100 points for performance and 100 points for new rule of pips point evaluation. I don’t want to forget on multiplication of different currency pair, which is already in calculation, so formula will looks like this:
volume of trade*pips gain or lose* pip conversion = result
2. Drawdown evaluation
As I said before, this rule is most important rule in whole trading contest. I suggest increase this evaluation from 20% to 45%.
I have one more indicator for measure performance of systems, which is combination of drawdown and performance on end of the month. Let’s call this E/D parameter (equity/drawdown). You can get this parameter when you divide amount of equity by maximal drawdown on end of the period (month). I guess this parameter will help contestants continue in trading even if start at biggining of the month will be bad. Most of the contestants namely wants to quit , when they have bad start and they don’t want to work on recovery. I would like to set up percentage of this parameter to 45% as well.
Result: now we can compare existing rules with my draft
Dukascopy evaluation: 50 points
Share of trades made with conditional orders (the more - the better)1 - 20%
Average pips gained on positive positions (the more - the better) - 20%
Average pips lost on negative positions (the less - the better)2 - 20%
Win/Loss ratio - 20%
Maximum % equity drawdown - 20%Performance, pips expert, popularity, dukascopy evaluation = 275 points
Alternative evaluation: 100 points
Maximum % equity drawdown - 45%
Equity/drawdown parameter - 45%
Avg. pip-points outcome from all positions -10%
Performance, pips expert, alternative evaluation = 300 points