Thread: Variance
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Old 09-20-2007, 08:29 PM
kimchi kimchi is offline
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Join Date: May 2006
Location: FU minbet
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Default Re: Variance

[ QUOTE ]
most of us wont live long enough to ever know.


[/ QUOTE ]

That's basically it.

A lot depends upon the system you use and the exptancy it produces coupled with the frequency you trade and the % of trades you expect to be profitable.

daytrading 200 scalp trades per day with a 75% success rate will probably show less variance over time than trend following with a 33% success rate and making a dozen or so round-trips per year.

Both systems can have the same expectancy for each unit risked, as the longer-term system can sometimes return huges multiples of the initial risk, although it will probably show more variance.
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