Paying For Certainty

"You have to pay if you want
more certainty of success."

The markets will always tell you how things stand.
Systems traders know that time is the most precious ingredient in trading.

What does that mean?

Well if you wait a little longer to get more information before making a trading decision, you will find that your profit opportunity diminishes.

On the other hand, if you decide to make your decision earlier, without waiting for more information, your profit opportunity will be greater (but so will your risk).

By testing these situations using your system, you can prove these important things to your own satisfaction.

For example, by introducing a change to your system rules, your test results will tell you how much you have to pay for more information or how much you will be paid for taking an extra risk. You will then have all the information you need to work out if the 'deal' is worth the money - to you.

Time is the vital ingredient here and waiting longer to be more certain will cost you money.

When considering possible changes to your system rules, you will probably be able to guess what their general effect is likely to be before you run any tests.

Results that deviate significantly from what is expected should be investigated as they may reveal opportunities for improvement or education.

Traders should experiment with new ideas as often as possible and keep checking back to understand why results turn out the way they do. This is an excellent way to consolidate trading knowledge and make potentially profitable discoveries.

Having software that facilitates the introduction of system changes is a considerable advantage.

 

Modus Trading
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Copyright David Bromley 2006
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