I reckon this must be an American sentiment as I see it on Marketwatch time and again where they compare something today with something in the past, then attempt to copy over a similar methodology which worked back then. Personally I think such a method of trading is crazy. Sorry Robert, usually I'm in agreement with much of what you say, but looks like not in this thread.
cut losses short, let profits run. Always use stop losses. A variation of this two rules I use in my trading with Hotforex. I also use automated version of this (placing stops and tp automatically because my style is scalping).
It depends on your system's profile to give out a general advice. In any case you would want to backtest it. Just for example, here's how we backtest the pyramiding-like position sizing techniques in Wealth-Lab: Increase/decrease size on runup/drawdown Pyramiding PosSizer -Eugene
this up top may be what you discribe. good to invest some time on this topic. let us know what you decide. cheers - https://en.wikipedia.org/wiki/Martingale_(betting_system) "Since a gambler with infinite wealth will, almost surely, eventually flip heads, the martingale betting strategy was seen as a sure thing by those who advocated it. None of the gamblers possessed infinite wealth, and the exponential growth of the bets would eventually bankrupt "unlucky" gamblers who chose to use the martingale. A martingale is any of a class of betting strategies that originated from and were popular in 18th century France." - unless and until you find something better, this ain't half bad... - chapters 4, 5 & 6 might be worth a browse... https://elitetrader.com/et/threads/fixed-ratio-position-sizing-money-management.303441/#post-5012086
to cut losses early, you need really good entries. otherwise you'll cut short every good entry with the others. not easy I prefer some slack in the closing time SL should never be hit, it's just there for capital protection
timeframe is irrelevant, except when you add spread (and except M1 surely). on higher TFs you need a smaller edge, because trades are bigger : more profits means less spread relatively. you gotta test your edge on every TF with zero spread, then add spread, and higher your TF until in profit, because spread will eat all profits on smaller TF (too many small trades)
Money management is like the “elephant in the room” that most traders don’t want to talk about. It can be boring, embarrassing, or even emotionally painful for some traders to talk about risk and capital management, because they know they aren’t doing it right.