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Let's say I have a system that takes an average of +7.0 points out of the
market each week. It has about a 65% win rate. The average trade is +1.4
points. What would happen to long term performance of the system if I stop
trading when I reach a total of +7.0 points each week. By doing this, I know
I would be skipping profitable trades, but I would be skipping losers too.
It just seems that if I hit +7.0 points on Monday or by Tuesday morning, I'm
limiting exposure to losers by standing down until next week.
Obviously, I'm going to hit a point where I encounter a max drawdown
somewhere and if that drawdown happens to start on a Monday what I would do
is continue to trade each day until I made up the drawdown and got back to a
cumulative +7.0 points per week before I would go back to skipping trade
days.
Give me reasons why this would not work in the long run.
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