HOME A Word of Advice The Applet FAQ	Equity curve simulation One of the few positive things that came out of the research on nuclear weapons was the development of computer simulations that came to be known as Monte Carlo simulations.  We can also apply such simulations to study equity curves generated by any trading system. (In terms of safety, this certainly beats tinkering with a nuke in your basement.) To this end, we can use the applet supplied below. All we need to do to generate a family of equity curves for our system is to follow these simple instructions: Enter the values for win/loss ratio and win probability. Select the number of lines you would like to draw. Click the 'Generate!' button. To learn more about the numbers you need to input and the numbers that are generated please consult the applet FAQ. For the systems I offer on this site, the numbers we need to use for the simulation are known and they are published on these pages.  For instance, for George I (previously offered here), the win/loss ratio was 1.06 and the win prob (also referred to as the winning frequency) was 0.58 (or 58%). Another of our systems, George II, comes with its own sets of numbers that can be found here (for ER2).
	Disclaimer: HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS UNLIKE AN ACTUAL PERFORMANCE RECORD. SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.