I was wondering what everyone thinks of the following:
Wouldn't the so called 'holy grail' really be a system with:
1. a positive expentancy,
2. that has been backtested, and then tested in real time,
3. that hasn't been over optimised,
4. A simple money management formula,
5. A system that matches their personal psychology
6. The trader who is using it, is comfortable and confident trading real money.
Because psychology and emotions (and money managment) play such a large part in the trading process, it could very well be concluded that there may be more people who may have in fact developed and traded systems that were potentially profitiable (had a positive expectancy) but simply abandoned them because:
1. Poor money management caused then to loose all their money in a drawdown.
2. The system didn't really match their personal psychology, eg; causing them to second guess the system and maybe not take trades.
3. The system had a drawndown period, and they then gave up the system to look for a "better" one.
Just some thoughts.
Wouldn't the so called 'holy grail' really be a system with:
1. a positive expentancy,
2. that has been backtested, and then tested in real time,
3. that hasn't been over optimised,
4. A simple money management formula,
5. A system that matches their personal psychology
6. The trader who is using it, is comfortable and confident trading real money.
Because psychology and emotions (and money managment) play such a large part in the trading process, it could very well be concluded that there may be more people who may have in fact developed and traded systems that were potentially profitiable (had a positive expectancy) but simply abandoned them because:
1. Poor money management caused then to loose all their money in a drawdown.
2. The system didn't really match their personal psychology, eg; causing them to second guess the system and maybe not take trades.
3. The system had a drawndown period, and they then gave up the system to look for a "better" one.
Just some thoughts.