Am I on to something? (senior advice needed on my equity curve) - page 2
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Thanks for the kind words. We're all in this endeavor together. 1% of us would be wealthy, 4% would make slightly better than our careers offer. And the rest 95% would lose whatever they invest. For those who believe in statistics to the core, this piece of statistic should send the message home.
I started coding may 2010. Within the first week, I created an EA with Profit-f of 1.30. Then I taught give me 3-weeks and I'll have a system with pf of 5%. It toke me 3-months to Break the 1.30 Barrier (with decent # of trades). By this time, I had allot of systems with 1.30 pf. I started to think just using Static lots of say 1.0 or 10.0 forever, would be the best way to go because the Curve stays the same lol and because I could swallow the losses easier at those levels and the profits were marvelous. But that's just more curve fitting on Historical performance.
For a system like your's however, I would use a variable lot size of 1.29 percentage of Equity and not a Penny more. Because risk is subjective and personal, and I don't want to be subjective nor changing my mind constantly, I just use the profit factor. There are better ways of determining Risk-Adjusted-Returns. And I'm working on understanding them. Understanding the Math behind Risk-Adjusted-Returns is the Right of Passage so to speak for a trader IMO.
I think you should keep trying to hit 1.5 profit factor because that's where the Magic happens :). I'm a firm believer that your Offense is your best Defense. Sure with bad money management I can lose trading a system with 5% edge just like losing with 1.3% edge. But forget text book 2%, I'll gladly risk 5% on 5% pf any given day and go down in a blaze of glory. Than try to figure out how to make a 1.3% pf system comfortable for me to trade. All IMHO.