Van Tharp's SQN with over 100 trades | Psychology and Money Management


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Van Tharp's SQN with over 100 trades

  #18 (permalink)

Legendary Market Wizard
Houston, TX
 
Trading Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 3,031 since Dec 2013
Thanks: 2,461 given, 5,445 received


Barz View Post
There are many ways to assess a system and none is perfect for every scenario, but it should take into account profits, risks or drawdown and frequency of trading. And perhaps a few other things.

The SQN captures those three things so it's useful, but limited, as with most things.

But that's kind of the point - it doesn't take into account two of those three. It doesn't assess drawdown in any way, in fact it doesn't really assess risk very well at all. It also doesn't assess frequency of trading very well given it's arbitary use of the "square root of the number of trades capped at 100"

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