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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