Number six in our seven steps is Duration.
Duration represents the expected length of time in winning trades, losing trades, and all trades. Almost without exception we find that trend- and momentum-oriented signals have a shorter duration for losing signals and a longer duration for winning signals. The reverse is true for mean-reversion trades.
Knowing your expected duration is important so that you can mentally and psychologically prepare for what will take place in your system. If you constantly want to lock in gains on trend signals, then you may very well miss the big winning trades that provide the positive expectancy Read more [...]
Number six in our seven steps is Duration.
Duration represents the expected length of time in winning trades, losing trades, and all trades. Almost without exception we find that trend- and momentum-oriented signals have a shorter duration for losing signals and a longer duration for winning signals. The reverse is true for mean-reversion trades.
Knowing your expected duration is important so that you can mentally and psychologically prepare for what will take place in your system. If you constantly want to lock in gains on trend signals, then you may very well miss the big winning trades that provide the positive expectancy Read more [...]