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	There is a place for Monte Carlo simulations - testing trading systems is just not one of them.     Monte-Carlo simulations, and many traders simulations not using the Monte Carlo approach, assume independence of successive trades. In practice, many trading systems/methods have a tendency to generate sequential trade results which are not independent.     Even where the trading system is not a source of sequential trade dependence, the effect of human nature (the trader) often generates serial trade dependence - after a series of profitable trades or following one very successful trade, trader emotion often impacts subsequent trade results.     Similarly for a series of losses or one significant loss. So actual trade results for a trader/trading system combination rarely exhibit serial independence.     This is why risk of ruin calculations are best performed on the basis of the actual trade results, not theoretical results from a trading system/method simulation. But this is another story - and is a level of sophistication beyond many traders, many of whom have not even determined their personal acceptable risk of ruin, let alone determined their appropriate position size approach based on that risk of ruin using sensible input data.     Yes, any Monte-Carlo work may be based on false premises.		Welcome Self Assessment Links Inner Tendencies What's New Contact Us Calm Secrets Tip of the Week Risk of Ruin