To understand the effectiveness / profitability of these signals, I choose to look at two measures of performance.
- Number of Trades : The number of trades is number of times the particular showed happened during the back-test period. There are two inferences from this number:
- If the number is small, the results are not statistically reliable.
- The number provides an insight into the prevalence of the signal. This is important when building a system
- Win-Rate : The win rate represents number of times this particular signal was profitable. Looking forward, this can be thought of the probability that this signal will be profitable
|Pattern||Win-Rate||Number of Trades|
|Bullish Engulfing Pattern||45.60%||6268|
|Bullish Kicker Pattern||54.6%||1511|