Expectancy custom fitness

EasyLanguage Programming

Created March 29th 2010 by sam028
Updated September 29th 2010 by zerobot007
 looks_oneBig Mike with 7 posts (0 thanks)looks_twosam028 with 4 posts (4 thanks) looks_3aslan with 1 posts (0 thanks)looks_4zerobot007 with 1 posts (2 thanks)

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Expectancy custom fitness

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Posts: 48,224 since Jun 2009

sam028
 Hmm, for me it's: Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss) , and the higher the better. But I'll check this, I'm maybe wrong. There is a post on this here.

Sam,

Using the same example above where I got 0.28 score, your formula yields 58.81. I'm not sure how to interpret the results, more research is needed here it seems. Is 58.81 saying there is a 58% chance of positive performing results?

Mike

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Big Mike
 Sam, Using the same example above where I got 0.28 score, your formula yields 58.81. I'm not sure how to interpret the results, more research is needed here it seems. Is 58.81 saying there is a 58% chance of positive performing results? Mike

The 58.81 means something like:
- if you keep the same win/loss ratio, and the same average winners/losers, you'll win \$58.81 per trade.

Your formula make sense, but why not dividing by the the average winner, for example.
Anyway, the thing is to compare in using the same criteria, and understand the meaning of used criteria.

 Success requires no deodorant! (Sun Tzu)

Platform: My own custom solution
Favorite Futures: SPX, Emini Futures

Posts: 48,224 since Jun 2009

sam028
 The 58.81 means something like: - if you keep the same win/loss ratio, and the same average winners/losers, you'll win \$58.81 per trade. Your formula make sense, but why not dividing by the the average winner, for example. Anyway, the thing is to compare in using the same criteria, and understand the meaning of used criteria.

Yes I agree with you on both counts. And because of this, I see no real advantage of having it divide out that last part. So I removed it from the version I am using now in my MC.

Thx
Mike

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