Saleability
Encyclopedia
Saleability is a technical analysis
term used to compare performances of different trading systems or different investment
s within one system. Note, it is not simply another word for profit
. 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." Others can be complex or counter-intuitive.
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.
Technical analysis
In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...
term used to compare performances of different trading systems or different investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
s within one system. Note, it is not simply another word for profit
Profit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
. There are varying definitions for it, some as simple as the expected or average ratio
Ratio
In mathematics, a ratio is a relationship between two numbers of the same kind , usually expressed as "a to b" or a:b, sometimes expressed arithmetically as a dimensionless quotient of the two which explicitly indicates how many times the first number contains the second In mathematics, a ratio is...
of revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
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." Others can be complex or counter-intuitive.
- Saleability = nProfits/nTrades - 1/(1+aveProfit/aveLoss)
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.