This visualizer is designed to show the development of a set of trades generated by a trading system. Hence the name "Trade Life". The Y axis indicates the Profit/Loss of a single trade, and the Y axis shows the time in each trade (in bars).
The dropdown lists on the top of the chart allows to target a specific subset of trades by selecting:
- Trade type: Total, Long or Short. "Total" is simply "all trades".
- Trade outcome: All, Winning or Losing. "All" plots all the trades generated by a system while other options allow you to analyze the trade behavior more selectively.
By manipulating the options, you can answer questions like:
- Is there a difference between winners and losers?
- Is the behavior of short and long trades similar or they have different patterns?
- How difficult it is for the winners or the losers to take off in any direction?
- Are there more winners taking off higher than losers going south?
- Maybe after some point in time, winners have a tendency to stall? and etc.
These charts can be used in conjunction with built-in MAE/MFE and Profit Distribution charts in Wealth-Lab 5. For more insight on the "trade life" charts, take a look in Thomas Stridsman's classic book "Trading Systems That Work".