The Quality Trading Coefficient. General Formula to Qualify a Trade and a Trading Methodology
Trading the financial markets is a wide activity nowadays. There are several indicators to measure this activity. The drawdown, the profit factor and the trading efficiency are some of them. This paper will present a different one: the quality trading coefficient. The new formula will indicate sever...
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| Format: | Article |
| Language: | English |
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Inforec Association
2018-01-01
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| Series: | Informatică economică |
| Subjects: | |
| Online Access: | http://www.revistaie.ase.ro/content/87/09%20-%20pauna.pdf |
| _version_ | 1819289269860040704 |
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| author | Cristian PAUNA |
| author_facet | Cristian PAUNA |
| author_sort | Cristian PAUNA |
| collection | DOAJ |
| description | Trading the financial markets is a wide activity nowadays. There are several indicators to measure this activity. The drawdown, the profit factor and the trading efficiency are some of them. This paper will present a different one: the quality trading coefficient. The new formula will indicate several particular aspects originating from the human psychological emotions and fears during transactions on the way to make profit. If the trade was fast and the price moved continuous to the profit target level, the quality trading coefficient will have a positive value close to one. When most of the time the trading position was on loss and the profit was made on the last part of the trade time, the coefficient will have a positive value more close to zero. If the trade is closed on losses, the coefficient will have a negative value tends to minus one if the market goes against the direction of the trade on the entire interval. Measuring this coefficient for all trades made with a trading strategy we can compare and categorize the strategies for any market and for any time interval. The quality trading coefficient became a new optimization criterion for the trading strategies used in automated trading systems. |
| first_indexed | 2024-12-24T03:04:10Z |
| format | Article |
| id | doaj.art-7e142e953fbd4f2ebcf8ff471ebda736 |
| institution | Directory Open Access Journal |
| issn | 1453-1305 1842-8088 |
| language | English |
| last_indexed | 2024-12-24T03:04:10Z |
| publishDate | 2018-01-01 |
| publisher | Inforec Association |
| record_format | Article |
| series | Informatică economică |
| spelling | doaj.art-7e142e953fbd4f2ebcf8ff471ebda7362022-12-21T17:18:06ZengInforec AssociationInformatică economică1453-13051842-80882018-01-012239710510.12948/issn14531305/22.3.2018.09The Quality Trading Coefficient. General Formula to Qualify a Trade and a Trading MethodologyCristian PAUNATrading the financial markets is a wide activity nowadays. There are several indicators to measure this activity. The drawdown, the profit factor and the trading efficiency are some of them. This paper will present a different one: the quality trading coefficient. The new formula will indicate several particular aspects originating from the human psychological emotions and fears during transactions on the way to make profit. If the trade was fast and the price moved continuous to the profit target level, the quality trading coefficient will have a positive value close to one. When most of the time the trading position was on loss and the profit was made on the last part of the trade time, the coefficient will have a positive value more close to zero. If the trade is closed on losses, the coefficient will have a negative value tends to minus one if the market goes against the direction of the trade on the entire interval. Measuring this coefficient for all trades made with a trading strategy we can compare and categorize the strategies for any market and for any time interval. The quality trading coefficient became a new optimization criterion for the trading strategies used in automated trading systems.http://www.revistaie.ase.ro/content/87/09%20-%20pauna.pdfAlgorithmic tradingFinancial marketsQuality trading coefficientTrading |
| spellingShingle | Cristian PAUNA The Quality Trading Coefficient. General Formula to Qualify a Trade and a Trading Methodology Informatică economică Algorithmic trading Financial markets Quality trading coefficient Trading |
| title | The Quality Trading Coefficient. General Formula to Qualify a Trade and a Trading Methodology |
| title_full | The Quality Trading Coefficient. General Formula to Qualify a Trade and a Trading Methodology |
| title_fullStr | The Quality Trading Coefficient. General Formula to Qualify a Trade and a Trading Methodology |
| title_full_unstemmed | The Quality Trading Coefficient. General Formula to Qualify a Trade and a Trading Methodology |
| title_short | The Quality Trading Coefficient. General Formula to Qualify a Trade and a Trading Methodology |
| title_sort | quality trading coefficient general formula to qualify a trade and a trading methodology |
| topic | Algorithmic trading Financial markets Quality trading coefficient Trading |
| url | http://www.revistaie.ase.ro/content/87/09%20-%20pauna.pdf |
| work_keys_str_mv | AT cristianpauna thequalitytradingcoefficientgeneralformulatoqualifyatradeandatradingmethodology AT cristianpauna qualitytradingcoefficientgeneralformulatoqualifyatradeandatradingmethodology |