Given that us traders spend quite a lot of 'dead' time in front of screens, I like to dedicate part of that time each day to learning something new about trading.
Something I come across occasionally is the concept of 'trading your equity curve' - the basic idea being that you revert to paper-trading after a period of losses until your strategy starts winning again. However this seems like a deeply flawed idea to me even though, like many ideas available online, it looks logical in hindsight.
The most obvious problem is the question of timing. If you paper-trade after some losses and resume once you've had a predetermined amount of wins again, what's to say you aren't about to enter another period of losses? Or that your biggest winners of the year were during your paper-trading period?
On the flip-side of that, if you are able to time your wins and losses well enough to avoid that problem you have probably found the trading holy grail and don't need this strategy.
Most importantly, if you have a tried and tested strategy that was developed without this process involved, I have a feeling it will completely kill the real-world performance if it's implemented casually.
Am I missing something obvious here, or is this (as I suspect) another batch of snake oil to avoid?
'Trading your equity curve' seems like a fallacy to me
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