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TradersCALM - Frequent Changes © "Dedicated to trading with good feelings." All services are free. |
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Why would anyone want to make frequent changes to their trading system? It varies, of course, but it typically takes about 250 closed trades to get sufficient actual trading results to be reasonably representative of theoretical results.   So if you are changing your trading system more frequently then how do you know a change is required? The answer is you probably have not done enough testing before trading commenced or you are using too large a position size for your account. Often one exchange contract is too large for an account - but they are ways to trade in smaller units than one exchange contract. Or maybe there is an element of curve fitting involved. When is a change of trading system indicated? When actual profits, over at least the last 250 trades, differ by more than 40% from theoretical profits. So not making profits, making too little profit or even too much profit, are all good reasons to stop trading and investigate the reason(s) why, and act accordingly - which may require trader change and/or trading system change. |
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