The Most Dangerous Mistake You Can Make In Trading.

New comment

Modifying A Good Trading Strategy Prematurely.

Strategies will often go through a losing period but the issue comes down to knowing when a change has occurred.


Many traders will try to tweak indicators, add filters or change entry rules after a few losing trades. This can cause overfitting of your strategy. It will mean your strategy is fitting to recent price action but won’t be increasing reliability.

Instead, try to set out how you will assess your strategy. Think about:

How much drawdown you expect

Changes in market behaviour

Execution problems

Whether the strategy is performing as expected in real time.

This will help you make decisions based on evidence.

If you have traded using the same strategy for years, can you tell me what evidence you would have that would indicate it’s time to change or stop using it?
New comment