It's very simple. For this, all transactions must be profitable.. To make all trades profitable, it is impossible to provide a stop loss in the system, since it, Sooner or later, will be hurt by the price. As well as, it is necessary that take profit always works. If the price does not reach the take profit, then we just wait, when it comes. Not in all cases the price reaches the take profit. Sometimes you have to wait for years 5 or even more. There may be cases when the price does not reach the take profit, at all, never. That's why, it is necessary to adhere to moderate money management with little or no leverage.
Let's move on to an example. Here's what happens to the EUR / USD forex pair over the past nine years — not a single losing trade. Consequently, PROFIT FACTOR is equal to INFINITY.
Test without reinvestment with a constant lot 10 000, that is, shoulder 10/1. Spread 0,0002.
At first sight, schedule выглядит впечатляюще, practically, perfect. But this is only at first glance, because it is necessary to take into account that only closed deals are displayed on the chart. As they say, until the deal is closed, no loss. By the way, usually, such charts are provided by sellers of trading systems, especially tested at Tradestation, they look spectacular there — with green dots, when the schedule makes a new high. And buyers fall for these tricks., unaware that such graphs do not reflect the true state of affairs. Also, similar systems, only with numerous averages are traded in numerous, so-called, PAMM accounts, for a long time showing phenomenal results in the form of a curve under 45 degrees without drawdown, but at one moment they suddenly drain everything in a few days.
And in fact, if you present the full picture on the graph, then it will look like this:
It can be seen that the account drawdowns are very deep and long. One of them is almost a whole year long. If you average on such drawdowns, then the account would be drained immediately.
Also, do not be impressed by the fact that if you observe a moderate shoulder without top-ups, then you can earn. It is forbidden, because this system was a simple fit for past data and can easily lose all the money on new data. He just cited it as an example of the fact that it is quite possible to accidentally earn quite a long time without stops by sitting out., as well as the fact that the profit factor, which many novice systems engineers consider the main indicator of the quality of the system, doesn't mean, practically, nothing.
Who cares, here is the condition of the system. Actually, this condition is a simple fit to the result, despite the fact that only two standard indicators were taken with almost standard parameters. The truth is there is a little trick — for MACD, instead of standard exponential averages, simple :)
