Optimizing Position Sizing Strategies and Trading Risk Management

Optimizing a position sizing strategy to manage trading risk can be challenging, and a detailed analysis of return and drawdown percentages is required to achieve an optimal strategy suited to the personal objectives of the individual trader. However, an important consideration is that production drawdown will usually be greater than that experienced in backtesting, while the return will usually be less, due to the effects of over-fitting (even when measures have been taken to reduce over-optimization, this will always creep in, to some degree).
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This is Episode 36 in the Darwinex 'Spotlight on Trading Indicators' Playlist: • Spotlight on Trading I...
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Content Disclaimer: The contents of this video (and all other videos by the presenter) are for educational purposes only and are not to be construed as financial and/or investment advice.
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[@Darwinexchange]

Just a quick update for everyone. Thank you for your patience while you wait for the next video. I've been working on all of the videos for our upcoming release of Darwinex Zero, and this has been taking all of my time. This is the reason I haven't been publishing the usual videos. I will have several more Darwinex Zero videos to produce and release even after release. Once completed, normal video service will resume... :) Thanks once again for your patience. Best, Martyn

[@peppuce88]

Thanks for update Martyn, your work is very valuable. Could you be so kind to answer my other comment below so I can keep myself busy while waiting for the series comtinuation? Thank you

[@AMaz-zx9sj]

Thanks for letting us know!

[@LithgowPanther]

Hello, I just wanted to say thank you for the effort. This is a truly excellent channel for when you are ready to move into the area more seriously.

[@shakeel2473]

Another Brilliant series Martyn. Thanks!

[@sergiogranero93]

Patiently waiting for the next episode 👏🏼

[@Darwinexchange]

Hi there. Glad you are getting value from the videos. I'm concentrating on addressing the Darwinex platform and eco-system at the moment, to answer a lot of questions that we get. Once that is complete, I'll be returning to more technical videos :)

[@MrVamcnani]

Hi Martyn, Your videos have guided me a lot in designing my trading process. When are you planning to continue the series?

[@Darwinexchange]

Hi there. I'm concentrating on videos addressing the Darwinex platform and eco-system at the moment, to answer a lot of questions that we get. Once that is complete, I'll be returning to more technical videos :)

[@firmandstrong8314]

Thanks a lot
I feel one good way of managing risk is setting a filter that closes trades immediately after it reaches a particular amount of money
the amount to be set as MAX LOSS can be an average of stoploss in the last five years on an asset, any trade that has loss of more than 50% of that average loss can be considered an anomaly and hence has to be closed immediately
this will help control loss due to sudden news event or heavy trending markets as you will suffer huge loss at that time because the stocastic may not quickly move to close your losing trade but give you heavy losses
all my assumptions can only be used when you are using a fix lot size, you may think about some other solutions if you want to use a relative lot size

[@Darwinexchange]

Thanks for your suggestions. I'm sure other traders will benefit

[@Investic]

Any Chance you will be covering your CSV file creation, i'll think this would be such a valuable tool to have.

[@MrVamcnani]

HI Martyn, Thanks a lot for your valuable and insightful videos. When are you planning the next video?

[@rickyehmer7923]

Haven't seen a new video in awhile.. what's happening? They are very educational.

[@Darwinexchange]

Hi there. Glad you are getting value from the videos. I'm concentrating on addressing the Darwinex platform and eco-system at the moment, to answer a lot of questions that we get. Once that is complete, I'll be returning to more technical videos :)