Log In    |    Join for FREE
Unlock Full Access
DaytradingBias on Facebook DaytradingBias on Google+ Follow DaytradingBias on Twitter

Defensive Money Management Explained: How to Evaluate a Trading Strategy (or Your Edge) Objectively

By Lawrence  

One of the fundamental questions that we have to ask ourselves when we see a profitable trading strategy is that whether the strategy will reform well in the future. All kinds of testing are invented from walk-forward testing to Monte Carlo simulation for the sake of giving us an idea how good (or bad) the strategy will possibly do. I have a different take on this subject and I think it is a very good idea to share it here.

Note: This article is very long and some basic understanding of statistics is required


  • System Performance Should be Measured Relatively
  • Statistics Based Performance Benchmark
  • Case Study: Emini S&P Daily Statistics and Their Implications
  • If Your Strategy is Really Doing Anything Meaningful, It Should Beat the Benchmark
  • Year to Year Relative Performance Key Metric on Consistency
  • Adapting the Technique on Higher Resolution Trading Strategies
  • More Thoughts on Short Side Trading Strategies on Emini S&P During This Mega Bull Run


(premium member only content below)

 The rest of the article is available to our premium members only.
 Login or upgrade your membership to view this article now.


Sign up now will grant you the rights to:
  • Unlimited access to all of our premium articles
  • Continue access to new premium content
  • Monthly newsletter on S∓P500, Euro & Gold outlook

As a paid member, you also get our daily market updates:
  • Proprietary swing trading signals
  • Our famous 3-Day Pattern odds analysis
  • Intraday Cycle Projection
  • Market biases & trading setups relevant for next day

Premium membership access. Extremely low monthly membership dues. Cancel anytime.

Premium content comment area availble to premium members only
Upload comment image

Brokerage Deals for Premium Membership


Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors.
Please read full disclaimer here.


DaytradingBias on Facebook
DaytradingBias on Pinterest
DaytradingBias on Google+
Follow DaytradingBias on Twitter
Subscribe DaytradingBias News Feed
We accept Bitcoin here

As Featured In

© 2015 Lawrence Chan / DaytradingBias.com. All Rights Reserved.