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James Muninn
@Muninn
I share deep dives on traders and strategies
加入 October 2022
201 正在关注    18.2K 粉丝
Always study. Always look for edge. @jfsrev has so many brilliant ideas and adaptions. It's not only about bagging those big winners, but also about cutting our losses (smaller). Jeff says that "If your win rate is below 40%, your top priority should be reducing your losses further." I tested it on Qullamaggie's breakout trades. It reduces the drawdown by almost a third, but gives up some profits..
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Appreciate the kind words and subscribing to our community. I’m making this reply public as the 3-stop strategy within T+3 has now been adopted by quite a number of traders — it’s only fair that everyone understands my statement: “If your win rate is below 40%, your top priority should be reducing your losses further.” Performance can be enhanced from loss management if bulk of your trades are slated to be losses, a reality that most of us need to accept as traders to our system as a business cost. In the display below, I show two different stop-loss applications and their resulting drawdowns, based on a 28% win rate over a 500-trade sample size. The time range of these trades depends on your own strategy — intraday traders, for instance, can easily accumulate 500 trades in under 3 months. The real value of the 3-stop strategy doesn’t appear in just a handful of trades. It’s a long-term discipline that requires consistency and repetition to gradually reduce your drawdown, as shown here.
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