Only a backtest can reveal if your strategy makes MORE money with LESS drawdown, versus letting profits run. NEVER trade a strategy because it "makes sense", backtest your trading ideas and trade the most profitable one (on a risk-adjusted basis), period. Over the years I have noticed that my most profitable trading systems are counterintuitive. (Very interesting topic by the way! )
There was a backtester/optimizer called Stratasearch which is no longer around...You could throw in as many rules as you liked with money management,and it would run thru hundreds of thousands of permutations and of course curve fit...More often than not,the exact opposite of what I believed backtested better than the holy grails...And of course,when I walked it forward,it all fell to shit
Flowfollower, Great post. I have struggle with use Profit Target vs Trailing Winners day to day for nearly a year now. Let me tell you something. Easier said then done day to day. The only way to know what works best for you is to test it. Test 1 : Trade management for 2RR Test 2: Trade management for trailing. Do this for 200 trades or 6 months. Afterwards you will know what works best.
Bingo...bingo...bingo. Congratulations you have escaped the pundits and guru’s malarkey. Grab them profits. Keep that high win rate up.
No no no Eastwood I grab them profits and average down them losses if the larger and immediate dynamic context supports averaging down. Then exit the averaged down with a profit. Like Doc Holiday...I say to the market “I’ll be your huckleberry”