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A powerful indicator created by RINA Systems and included in the TradeStation tr

ading
system report is the RINA Index, which represents the reward-risk ratio per one
unit of
time and it compares the select net profit
(net profit minus the positive and negative
outlier trades, that is minus the abnormal trades that overcome the three standa
rd deviation
limit away from the average) divided by the average drawdown and again divided b
y the
percentage of time in the market indicator (the latter is always taken from the
TradeStation
system report). This indicator should always be over 30 and the higher the bette
r.
In order to measure consistency in results the TradeStation system report automa
tically
calculates the three standard variations positive and negative limit for the ave
rage trade
and for almost all the indicators. This gives an idea of how much the indicators
could
naturally oscillate between these boundaries. Usually the coefficient of variati
on (standard
deviation divided by average) should never be higher than 250%.
In this paragraph we have tried to figure out some practical guidelines for a sy
stem
developer without delving into much theory or philosophical considerations. With
out
fretting about being considered sloppy system traders we dare to openly recognis
e that
experience we can understand at the first glance whether a trading s
after 20-years
ystem
deserves to be considered with attention or not. The first aspect we check is th
e equity
line, which needs to be growing smoothly and without many deep drawdowns. Person
ally
we also appreciate many flat times , that is parts of the equity line that are horizont
al:
it means that no trading was done in that period since a filter took the system
out of the
market. We believe that there is no need to trade continuously and a good system
should
know when there is some edge to be exploited over the markets and conversely whe
n it

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