In our desire to be right, many of us have “perfectionist tendencies”.
But this can be quite harmful to the system development process. If, instead of trading your system, you are constantly fiddling with it in search for the “Holy Grail” then you are probably leaving a lot of money on the table.
As trader we suffer from recency bias; that is our most recent trade’s impact our thought processes. This means if we tend to alter our system reactively and it ends up being curve fitted to the most recent market conditions.
So adopt a structured process to make changes. Trade your system for a month and then make one or two small changes. A bit like you are conducting a science experiment in a controlled environment where you change one or two variables at a time so you can observe the impact they have.
That way you can leave your system alone to continue to grind out the profits, instead of wasting energy impulsively reacting to what just happened.
For most people if they can learn to make 20-30% a year on their “imperfect” system that will be plenty enough to reach their financial goals.
Remember: It does not take a perfect system to be profitable in the markets.
About the Author
Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (get free access). He is a co-owner of Forex Signal Provider FX Renew (Get a FREE 30-day trial). If you like Sam’s writing you can subscribe to his newsletter.