Subscribe Feed (RSS)Lots of trades today
September 21st, 2005 by eyal | Filed under Day Trading. |
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I’ve taken quite a number of trades today. It is definitely more challenging to follow a large number of candidates and positions but at the end of the day it smoothes out your daily and weekly equity curves. Assuming your system has somewhere between 40% and 60% win ratio then if you take one trade a day then it won’t be uncommon to have 5 or even 10 losing days in a row. I don’t know about others but for me a couple of weeks of daily losses is psychologically difficult to handle. Of course you may also run into streaks of 5 or 10 wins in a row - this part is not so difficult to handle ;)
One way around this swings in daily/weekly profitability is taking a number of smaller positions (so your overall risk is still manageable) and riding out streaks in a shorter time-frame. The downside of this is having to divide your attention, higher risk for mistakes and potential difficulty staying in control without shooting from the hip while still acting decisively on multiple positions. It takes some practice and experimenting to figure out the right balance for yourself.
