The SQN score normalized to 100 trades. For systems with few trades, assuming 100 trades in calculating the SQN score can provide a sense (potentially false) of a system’s quality after many trades. For systems with hundreds of trade, normalizing the SQN score to 100 trades emphasizes the signal to noise ratio. A high number of trades can mask a weak signal to noise ratio and provide an impractical figure for developing an effective position sizing strategy.
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