Sticking to the plan - that's where a lot of people get tripped up - they are too quick to "pull the plug."
I have 8 open positions right now:
2 highly profitable
3 around breakeven
1 moderate loser
2 significant losers (1 will be closed on Monday)
$1425 in open trade equity right now
Have a great weekend!
When allocating risk capital per trade, would you give heavier weight-age to markets with better historical returns based on the system?
ReplyDeleteFor example, 8 markets traded using the same system, the best 2 markets allocated 50%, 4 allocated 40%, and 2 allocated 10%.
That is certainly a valid way to do it. I personally don't weigh my allocations like that because:
ReplyDelete1. Any time I start a new system, I start at the minimum size possible. As the system makes profits, it will receive higher allocation. I do this very slowly - a system has to really prove itself, with real money, before I do this.
2. Going forward, I don't know what is going to be good, and what isn't. Since I don;t know, I like to keep everything close to even (subject to rule 1).
Thanks for the question!