The numbers behind the system

Trading Discussion
1

Hello!

If you have a system and lets say it uses some indicators. For simplicity, one moving average.

I have discovered the magical power of statistical analysis on Forex trading. For example, when taking trades one needs to record details, such as the price the moving average was at when the trade was taken, along with things like SL and TP. Then once a good number of trades are taken, one can do statistical analysis and determine what price numbers the moving average works better with the system. Then future trades can incorporate the refined details that were discovered when doing the statistical analysis. This would theoretically improve profitability since the trader would know what the moving average needs to be doing to have the highest chance of being right.

What do you all this of this? Is this something you do? Do you record the numbers for statistical analysis? Do you not bother with this? Have any of you done this and found higher levels of success? I feel that without the details one cannot determine what is separating a good trade from a bad trade due to the sheer uncertainly.

Its a lot more work to record the fine details.

Thoughts on this?

2

Yes, record the criteria relevant to your trade decision. A number on its own however will mean nothing next week, it is the relationship of the number to other numbers that is important - that number to quoted price, to the numbers that came before, to the numbers that followed, etc. So maybe the value of an MA at a certain time on a certain day is not much help, but the slope of the MA line or where price was relevant to that line at that point could be very helpful (and a lot less work).