A reader asks, “How do I use the program”. 

Here is the step-by-step process of running the TacTrade example discussed earlier on this site.

First the returns data was copied from the TacTrade web site over a period of 2 months during the summer of 2001.  (Note that the data is posted as a picture on that site so the individual profits and losses were manually transcribed to an excel spreadsheet.)  Since the TacTrade results are posted in points for the Emini S&P the values in the spreadsheet are multiplied by $50 and then a reasonable commission is deducted.  This is the profit or loss after commission for trading a constant 2 contracts per trade.

This column of results is copied and pasted into a notepad document and a header added to indicate to TradeSim that this is a returns file.  Here are the first few lines of that file:

Return Data
TacTrade Total W/ $9.60 commission
$
 $77.90
 $277.90
 $240.40
 $140.40
 $52.90
 $(109.60)

The first line indicates that this is a returns file, the second line is a title telling what this data represents and the third line is the unit of measure for the data that follows.

When you install TradeSim this sample file is installed on your computer in the examples folder in the folder where TradSim is installed.  Feel free to move these example files to a more convenient place.  On my system the file is at d:\Examples\Returns\TacTrade w.commission.txt.

Now that the file exists click on the Returns File menu or the Returns button in the files box to bring up the returns selection box.

Then chose the directory and file and press the OK button.

This returns data is read by TradeSim and presented in tabular and graphical form by checking the Returns Table and Returns Chart boxes.

Note that the file path, units, Expectancy, Probability and number of data points are listed on the top lines.  The data follows and is sorted into ascending order.

Now setup the conditions for the run in the Main TradeSim window.  The returns data includes 252 trades so to simulate that same period of time, set trades to 252.  This could be varied to see the affect of trading for more or fewer trades.  The number of Trials is set to 1,000 to give enough repetitions to be useful but not be too time consuming.  Starting equity is set to $6,000 and Minimum Equity is $4,000 in this example.  These are just reasonable numbers for this trading method – but it is useful to experiment with Starting Equity to see what happens if trading starts under capitalized.  Minimum Equity represents a reasonable margin requirement.

We are interested in seeing the profit at the end of the 252 trades, the drawdown in percent, and trading a fixed risk on each trade – no pyramiding.  In this case the fixed risk is 1 but since the returns data represents trading 2 contracts, a risk of 1 equals 2 contracts.

Run this setup and the results will be as shown on the TacTrade page. That is all it takes to get started.

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Copyright 2003 by LSS Limited.

2002.01.02