For the statistical minds out there...
If a day-trader actively takes several (or more) trades thru an entire session, there is a 1/3 odds of hitting peak equity curve on first trade of the morning, 1/3 odds peak equity sometime midday and 1/3 odds peak equity on final trade of the day.
That is just pure math, statistical odds of random distribution. No two ways about it... if you trade long enough, law of averages will certainly play out just like that.
On a fundamental basis that unfolds because some days price action is most favorable for your approach early, other days in the mid-session, other days at the end. Not to mention the personal execution variables involved.
Which means for those who trade all day every day, two-thirds of the time they will be frustrated at day's end because peak equity curve was reached way earlier several trades ago, and drawn down by the close.
Statistically speaking, you are better off quitting every day at some point of averaged profit gains versus hitting it all from bell to bell.
This has nothing to do with one's system or prowess or acumen as a trader. It is purely the universal laws of mathematics at work. No single trader on earth ever has or ever will end every day at their peak equity high. Matter of fact, no trader on earth ever ends even half their days at peak equity high over a long period of time.
Universal laws of distribution at work there
If a day-trader actively takes several (or more) trades thru an entire session, there is a 1/3 odds of hitting peak equity curve on first trade of the morning, 1/3 odds peak equity sometime midday and 1/3 odds peak equity on final trade of the day.
That is just pure math, statistical odds of random distribution. No two ways about it... if you trade long enough, law of averages will certainly play out just like that.
On a fundamental basis that unfolds because some days price action is most favorable for your approach early, other days in the mid-session, other days at the end. Not to mention the personal execution variables involved.
Which means for those who trade all day every day, two-thirds of the time they will be frustrated at day's end because peak equity curve was reached way earlier several trades ago, and drawn down by the close.
Statistically speaking, you are better off quitting every day at some point of averaged profit gains versus hitting it all from bell to bell.
This has nothing to do with one's system or prowess or acumen as a trader. It is purely the universal laws of mathematics at work. No single trader on earth ever has or ever will end every day at their peak equity high. Matter of fact, no trader on earth ever ends even half their days at peak equity high over a long period of time.
Universal laws of distribution at work there
