One metric I use to gauge tradability is the R‐squared calculation. It measures how close an equity curve fits a regression line. A 100% reading suggests the equity curve is very smooth, representing a straight line. A low reading suggests the equity curve is very bumpy and difficult to trade. I generally prefer strategies with 90+% R‐squared

FIGURE 7.1 Traders need to know a strategy's return per unit of risk to gain an insight into how returns are generated.

I hope you will welcome the ideas I share with you in this book and if you have any questions please do not hesitate to contact me via my web site www.indextrader.com.au.

FIGURE 2.2 If you're undecided about whether or not you'd prefer to be a systematic or discretionary trader, you could do far worst then follow what the professional money does, trade on a systematic basis!

FIGURE 2.5 Performance of Richard Donchian's 1960 Four‐Week Rule strategy demonstrates markets have not changed over the last 40 years, despite the array of financial crises that have occurred. It supports the old adage that ‘the more markets change, the more they stay the same’.

There is no sidestepping, ducking or ignoring ROR. It's an immovable and immortal force that will not be ignored or denied. It exists, it's real and it's fatal. If we unpack ROR we can break down the fault into the two key weapons against ROR, money management and expectancy. Poor money management: Most people over trade their account failing to

FIGURE 3.1 There is a vast array of techniques within the universe of trend trading.

The best loser is the long‐term winner.

I'm principally a pattern trader. Apart from using the average true range and a 200‐day moving average, I focus purely on price.