- Saleability
Saleability (also called profitability) is a
technical analysis term used to compare performances of different trading systems or different investments within one system. Note, it is not simply another word forprofit . There are varying definitions for it, some as simple as the expected or average ratio of revenue to cost for a particular investment or trading system or "ratio of the number of winning trades or investments to the total number of trades or investments made, a number ranging from zero to 1." [cite journal|journal=(incomplete excerpt) Technical Analysis of Stocks & Commodities Magazine|first=Michael|last=Harris|date=September2002 |title=Improve Your System With The Profitability Rule|url=http://www.traders.com/Documentation/FEEDbk_docs/Archive/092002/Abstracts_new/Harris/harris.html] Others can be complex or counter-intuitive.:Saleability = nProfits/nTrades - 1/(1+aveProfit/aveLoss) [definition was published in the journal "Technical Analysis of Stocks & Commodities Magazine":ibid]
This is computed for each system or investment being compared over the same period long enough to include significant "ups" and "downs". A suitable period is something like the last 5 to 20 years.
= References =
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