Hello everyone, 

I've finally collected enough proof to say that my strategy works ( on paper ). Why on paper? Because these are paper traded / backtested statistics, not real trades which is an important distinction. 

**What are we're looking at?**  
This is a Monte Carlo simulator on my paper trading statistics. In short: the simulator takes my trading stats, and calculates the possible outcomes as if you're actually trading them. Each scenario is then run/rerolled a 100 times, which gives us different sequences of outcomes. That is how we get the best , worst, average case, and everything in between. My trading stats for this simulator includes:  
\- 818 trades  
\- 56,9% winrate  
\- 2.18% avg return  
\- 1462$ avg win  
\- 786.99$ avg loss  
\- 10% median allocation ( allocation size from total portfolio value )   
\- 101 stop-losses hit out of the 245 used   
\- **Small disclaimer:** this also includes some experimental data. The winrate of the past 30 days were 61.4% with an average return of 4.88% for example, which is closer to my actual performance if I take all my trades as seriously as possible. 

**What I am doing**  
I am trying to come up with concrete rules, which at this point are still hard to define, so the best I can give you guys is the formula of what I am doing. 

1. First of all we take a look at the snapshot of the last 3 months on a daily chart. I take 3 months because I have once read in a research-paper ( can't remember which one sadly )  that taking a snapshot of 3 months was the best performing snapshot month for acting as a "base" of the analysis. This means that if we would take 2 months for example - according to the research paper, that would give worse predictive results for the future than 3. 
2. Then its important that we can see a trend ( it would surprise you of how accurate you can gauge a trend with only 3 months of data ). 
3. If the trend is flat, we do nothing
4. My trade bias is always towards the longs, which means that I am really shy on taking short trades. This means that I am actually looking for a 3 month snapshot in which we either have a strong reversal signal, but even better, a strong uptrend that either broke the snapshot highs or is about to ( lets say using an ascending triangle pattern ) 
5. My allocation is then based on how strongly I feel about the success rate of the trade. I don't really have a formula for this yet so its kinda vibes based. But longs in general have a 100% allocation as long as the stop-loss can be placed at around 5% loss. I use the ATR x2 interval in order to determine my stop-losses, which in general works really well. I aim for a max of 3% loss per trade ( of total portfolio value ). This means that sometimes I set my stop-loss on a wild loss, like 30%, but only allocate 10% at the start, and then increase the allocation when the trade goes well. 
6. Shorts always have a 10% allocation and I never increase them and I take profits as soon as possible ( usually at 10% ) 
7. I take profits for my longs usually around 20-30%. I am not entirely sure whether the math is mathing there, but on average, we get a 2.18% return in the long run per trade. But take the disclaimer on top of this post in mind.

And thats basically it! Its boring, but it works for the long run!   




A working formula for my TA bros