Plugging these stops with the values suggested by the surface charts into the
system as we left it in Chapter 8, and then testing it on long trades only, produced the
results in Table 20.1. Comparing this table with Table 8.4, we can see that using the
stops and exits from our research made quite an improvement, despite a much lower
average profit per trade and lower profit and risk factors. Improvement number one
is a much higher risk–reward ratio of 1.26, which means that the individual trades
have become more homogenous and similar to each other, which in turn means that
the risk is much lower. This is also reflected in much lower standard deviations for the
profit and risk factors. The second improvement is a much higher percentage of prof-
itable trades, which, if nothing else, should make the system more fun to trade. The
drawdown measured in percentage terms also is a little lower than in Table 8.4.
Last but not least, the average trade length has decreased by more than 60
percent, which also has resulted in much less time spent in the market. At the same
time, the average profit per trade is only cut in half. Thus, the trades we make with
the optimized stops and exits are much more profitable and efficient per days
spent in a trade. Theoretically speaking, spending only one-third of the time in a
232 PART 3 Stops, Filters, and Exits
FIGURE 20.9
Number of profitable trades, variable 3.