Thank you for your response. Great insights. I found instead of generating high Alpha, I ended up with high Beta and a mediocre Sharpe. Over many years that is actually not so bad.
Expand your knowledge further and of course always try out your strategies first on a demo account, and just manage your risk better. If you are really into the whole trading thing you should dedicate more time.
Focus on education, and knowledge first. Once you get the theoretical hang of it, go about trying your strats on a demo and see if they work out. If they do start trading small till u get a practical taste of things and after a long while probably, you will be experienced enough to try some crazy stuff out. All of that if you are working alone.
Sound advice to become part of 98% of traders who never make any money. Trading is like everything else...as I believe BNF said it became muscle memory. No amount of strategies or analysis, systems, journaling or backtesting are going to help until you know what to look for, and you can only know what to look for by looking at miles and miles of charts. It would be like buying a bunch of books on how to play golf, and then expecting to hit a hole in one every hole...which I think is the expectation of most retail when they start out. I recall I had a guy doing some tile work and we got to talking. He was big into forex and was touting how he had some trade signals he always waited for confirmation. I took a look at the chart and in a couple seconds said "oh yeah, well I'd be a buyer here", and his response was "you can't just buy without getting your signal confirmation." Anyway the next day price popped bigly. The moral of the story is don't take trading advice from my tile guy! jk he did great work and for all I know is making money in forex. The point is I didn't need to get any signal confirmation...I could just see from the chart.
[ Most of his QUOTE="Laissez Faire, post: 5910909, member: 206390"]I'm fairly sure it's the other way around, but maybe you mixed it up. So, risk can be precisely determined while reward can only be estimated. If you trade outright in a liquid market using hard stops it's essentially the same.[/QUOTE] %% Sounds right , but depends a lot on which market. And looks like you are aware of that. MOST leveraged markets , its so easy to lose big or big % ,have to do risk control to the max. MOST businesses , risk control to the max is not a good business plan @ all; good customer service, rewards , plans are much more important.............. Lots of things can help, +for many, your post #4; +Dave Ramsey said don't buy a new car unless you a are millionaire. LOL NOR is he saying you have to buy a new auto.
I created something similar...my spreadsheet shows the return on capital that is at risk which is essentially the same thing as the Sharpe ratio but more dynamic. Where the Sharpe ratio will tell you how much capital you are expending for a return on an investment compared to other investments while normalizing volatility... mine calculates how much risk you are taking for that return on capital. IMO it's more important to know the return on risk than the return on capital. Do I get a Nobel peace prize???