where column E refers to the net profit for all markets. The dollar mark inside the
cell reference E$2 makes the formula adjust automatically to the number of mar-
kets tested. This makes it easy to copy and paste tables between spreadsheets,
instead of having to create a new table for every new spreadsheet.
Cell C70 shows the average number of trades for each market. The value
50.20 is calculated using the formula AVERAGE(C$2:C66), in which column C
refers to the number of trades produced by each market.
Cell C71 shows the standard deviation of the number of trades produced. The
value 11.73 is calculated using the formula STDEV(C$2:C66). It indicates that
68 percent of all trading sequences will produce somewhere between 38.47 (50.20
11.73) to 61.93 (50.20 11.73) trades, which is further indicated by cells C72
(C70 C71) and C73 (C70 C71).
The formulas for cells D70 to F73 are the same as those used in cells C70 to
C73, except that the calculations are based on the data in columns D to F.
If you ask me, I think a high number of profitable markets (cell H68) is way
more important than a high number of profitable trades (cell D70). You shouldn’t
care so much about the outcome of the very next trade, as long as you know you
will end up on top if you do what you should over a longer sequence of trades. A
psychiatrist specializing in “treating” traders once told me that he wished all
traders could learn to focus on the trading procedure over a specified time period
instead of the event (trade) at hand. Then, all traders would have a much easier
time cutting their losses, because letting a losing or slow trade run only makes it
more difficult to reach the true goal—to produce a profit at month’s end instead
of with every single trade. From this it also follows that a high number of prof-92 PART 2 Trading System Development
FIGURE 7.2
Summary table showing market results.