And one more thing...
Anybody that adheres to a set of rules for entry and exit is going to miss great trades, and get unlucky from time to time with losing streaks...
It only makes sense, because every system has strength and weakness. During the year, as you execute your trades, you are simply hoping that the market will give you a chart that matches your rule set.
But there is never a Holy Grail system, because every single trade has the potential for loss.
Plus, if you are trying to compound your winning trades, and get a nice parabola, every loss with a high equity curve and higher risk is going to knock your balance down further than the start of the previous winning trade. Without a substantial edge, your equity will head downward, even with a positive pip count at the end of the year.
This is why the risk averse trade a set number of lots every single trade, thus avoiding quick wipeout but also eliminating the opportunity for exponential compounding. Yet, they will have a positive return at the end of the year if they have a positive pip count.
Anybody that adheres to a set of rules for entry and exit is going to miss great trades, and get unlucky from time to time with losing streaks...
It only makes sense, because every system has strength and weakness. During the year, as you execute your trades, you are simply hoping that the market will give you a chart that matches your rule set.
But there is never a Holy Grail system, because every single trade has the potential for loss.
Plus, if you are trying to compound your winning trades, and get a nice parabola, every loss with a high equity curve and higher risk is going to knock your balance down further than the start of the previous winning trade. Without a substantial edge, your equity will head downward, even with a positive pip count at the end of the year.
This is why the risk averse trade a set number of lots every single trade, thus avoiding quick wipeout but also eliminating the opportunity for exponential compounding. Yet, they will have a positive return at the end of the year if they have a positive pip count.