Follow Up on Which Strategy Do You Prefer
By Dave Mabe
Last week, I shared a chart of two strategies and asked which one you preferred.
Here's the chart:
Several folks responded, and while it wasn't unanimous, the strong majority preferred Strategy 2.
You might have noted this comment in the original post:
Before you answer, consider that both strategies have comparable win rates and dollars allocated per trade.
What I didn't reveal, though, is something very important about these two strategies.
They are, in fact, the same strategy!
Same entries, same exits, same symbols, same direction.
The only thing that differs is the position sizing.
Strategy 1 uses constant share sizing - that is, the same number of shares for each trade.
Strategy 2 uses a better approach - sizing based on a constant dollar amount.
Importantly, the average dollars per trade is the same for both strategies.
Do you still think position sizing is boring?!?
-Dave
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