Dislikedwhat if I choose to trade the same two lots you're trading in the example you cited? If the two lots lead to a loss, you lose 200 pips and I lose 60 more or less. If the two lots end up a winner, our winnings are exactly the same. Is it better to follow the money management "basic" just because that's the rule?
Maybe I missed something in your argument. If so, please feel free to clear it up for me. In the meantime, good luck on your trades.Ignored
so before, for example, if tp 100, sl 100, and you trade it for a year, and you found you win/loss ratio may be 1:1, so after 1 yr, you end up break even.
if you change sl to 30, still tp 100, you trade another year, you found that you win/loss ratio is now lower: 1:3, but even you win 1 and lose 3 for every 4 trades. you still end up break even, because
1*100 tp = 3*30 sl (approximately).
this is just a common example when we adjust a system's sl and tp trying to expand profit and reduce loss. however, it is more than often in vain. above example shows why.
however, sometimes, adjusting SL might improve system's performance. and this 30%~50% SL seems such a case.
looks to me, yen is correct on this one. when you cut 50% SL, you losing probability doesn't go up 100%. therefore, ultimately, loss is reduced, overall profit increased.
all in all, this system's parameters are liable to further optimization, which is a great thing.