trading

trading

Wednesday 13 April 2022

Trading is a matter of making trade-offs. Use wider stops – and increase the win rate in exchange for larger drawdowns. Name the tactical change to a trading program and there will be trade-offs. My trading regime is filled with trade-offs. A high Gain-to-Pain ratio and Profit Factor are my goals. I give up absolute profitability as a trade-off. Aggressively I protect trading capital. I cut losses very quickly – this protects capital with the tradeoff of being stopped out of a lot of trades that subsequently become winners.

Trade-offs. There are always trade-offs. There is NO way to optimize for all the outcomes you want.  The wrinkle in playing the trade-off game is that there are always unintended consequences. Sometimes the unintended consequences are good news, more often they are unwelcome. Then, in the process of addressing the unintended consequences, new trade-offs occur.



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