Building a trading strategy is part of a very special category of problems. First, it is time dependent meaning that the data you analyze is all the same (prices) but shifted in time. Therefore the problem consists in recognizing patterns within charts. Secondly, you don’t want to predict anything about the chart itself, you usually want to predict something about the future, as in weather forecasting or sports bets. In that regards, trading is a lot like gambling.But what exactly do we want to predict? Do we want to predict the high of the following period or perhaps the overall movement of said period? Here are two things that are more logical and easier to predict.The parameters discussed are used to grade single trades, not to mistake with techniques that asses the quality of an entire strategy. These are parameters on which to optimize your strategy.Profit over time The idea behind this parameter is that a trade should make the most profit in as little time as possible, in fact, money that is invested in a trade cannot be invested elsewhere and long-lasting trades will occupy your money and your attention while you could have perhaps made better profit elsewhere. With this ide…
