Stop-loss Version
As it turned out, the best version of this system, using the percentage concept, only
managed to produce an average profit per trade of 0.12 percent. However, one
major reason for this is the much shorter average trade length, when compared to
the other three systems tested so far. The best version of the system incorporates
a stop loss of 0.4 percent, a profit target of 3 percent, and a maximum trade length
of four days. Figure 20.19 and Table 20.7 show the results for this version, to be
compared to Table 14.6.
Table 20.7 shows that this latest version of the system has a slightly lower
average profit per trade than its predecessor. That the risk–reward ratio also is
slightly lower than previously also adds to the not-so-good news. However, the sit-
uation isn’t as bad as it might seem at first glance, because both the profit and risk
factors are slightly higher, albeit with a higher standard deviation as well. Another
piece of good news comes with this latest version of the system: If you divide the246 PART 3 Stops, Filters, and Exits
FIGURE 20.19
Results of stop loss on Harris 3L-R pattern variation.