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Strategy hopping

Abandoning a method during its normal losing stretch and adopting a new one, repeatedly, so no approach accumulates enough trades to be judged.

Every positive-expectancy strategy has losing runs that feel like failure. A system winning four trades in ten will produce five consecutive losses regularly. A trader who switches after each such run experiences only losing streaks, by construction.

The hop usually arrives with a new source: a course, a room, a video. The new method then delivers its own normal losing run, and the cycle repeats with the added cost of never developing skill in anything.

Set the evaluation terms in advance - a minimum number of trades, an expected worst drawdown, and a review date - and change nothing before them. Judging a method requires a sample-size, and the whole point of fixing the terms early is that the decision to quit gets made outside the drawdown. See grit-vs-stubbornness.

Related: grit-vs-stubbornness, sample-size, indicator-shopping, quit-point

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

An equity curve and its drawdownAn account balance rising over a year, falling from a peak to a trough, then climbing back to the old peak.ACCOUNT EQUITY$20k$12k$8k024681012TIME (MONTHS)PEAK $16,000TROUGH $12,000DRAWDOWN−25%RECOVERY
Equity curve and drawdown. An account balance plotted month by month. The fall from the $16,000 peak to the $12,000 trough is a 25% drawdown, and the shaded area lasts until the balance climbs back to the old peak.

Educational only, not advice. Spotted an error? Post in Site Feedback.