focusedfinance posted: Question - if a trading system has an edge, and say that edge exhibits itself over say 'x' trades, surely things like 1% or 3% or whatever rules don't matter?
All you need is to have enough money in your account for your system to display its edge.
You need to define what edge is. You need to collect the data which exhibits with what risk model will give you what maximum risk in terms of relative drawdown and maximum drawdown and from there form a base psychology mindset to accepting that risk and being comfortable with trading that amount of risk. . You going to need to be a lot more specific if you expect any type of answer to yourself.
Edge would be a system or approach where the sum of wins is greater than sum of losses
Drawdown (objectively) is less important. Edge / profit factor implies that drawdowns will be recovered. Base psychology would be that an individual outcome is random, but a large number of random outcomes creates profitability.
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