Discretionary FX. 9 years - most of them wrong. Darwinex #XTXJ To me, crazy taxi is just a regular taxi.
Joined October 2022
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youtube.com/watch?v=BEff7PWY…
I did a video on how I approach High Timeframe Bias after I was asked how I do this sort of thing.
Perhaps it can be helpful.
prop firms catering their audience to retard scalpers is a really strong move actually
Trailing DD flattens the right tail of (successful) swing traders while catering to an audience that can't hold a trade for more than an hour without going into a full blown panic attack.
V retweeted
KNOWING WHEN YOUR EDGE IS DETERIORATING
Your strategy can stop working long before your equity curve makes it obvious…
- An edge rarely disappears with one catastrophic loss
Sometimes it erodes gradually:
- smaller winners
- worse execution
- fewer quality setups
- or a market regime your strategy wasnt built for
The research I found:
“A study of 60 published investment strategies found that their Sharpe ratios fell by roughly 50% after publication. The authors linked much of the decay to overfitting and inflated backtest results—not simply competition. (McLean & Pontiff, 2016; related follow-up research.)”
What should you monitor?
• Rolling expectancy:
Are you still earning positive R per trade?
• Profit factor:
Is gross profit shrinking relative to gross loss?
• Execution costs:
Are spread and slippage eating more of your edge?
• Market regime:
Are your results deteriorating specifically in the conditions your strategy should handle?
• Statistical significance:
Is the change meaningful or just normal variance?
One bad week proves very little.
A persistent decline across multiple metrics deserves investigation.
The framework we need to work on:
- Define performance thresholds before emotions take over
- Compare live results with realistic backtest expectations
- Separate regime mismatch from genuine strategy deterioration
- Reduce risk, retest, or stop if predefined conditions are breached
So a serious takeaway:
Dont abandon a valid edge because of random losses.
But dont defend a failing strategy because ur emotionally attached to its backtest
- Monitor the evidence!
Adapt before the drawdown
forces you to.
V retweeted
"My lesson from Soros is to start every meeting at my boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it." - Nassim Nicholas Taleb in Fooled by Randomness
Interesting read!
5 Tweets on:
FINDING YOUR REAL EDGE
Most traders ask:
“What strategy should I trade?”
Institutions ask a different question:
“Where does my expected return come from?”
An edge can come from:
• Information
• Market structure
• Behavioural biases
• Momentum
• Mean reversion
• Carry
• Execution
• Risk management
- here is the important part:
An edge must be measurable.
“For example, BIS research on FX momentum found a historical spread of up to ~10% per year between past winner and loser currencies in its sample. The researchers also found that transaction costs explained part of the returns.”
- this is the difference between an idea and an edge
“I think momentum works.”
- does not equal
“Across a defined sample, under defined conditions, this behaviour produced positive expectancy after realistic costs.”
Basically something you can test!
- the Forex market is enormous: BIS recorded approximately $9.6T of FX turnover per day in April 2025
Which means!
There are thousands of possible behaviours inside that market..
Your job isnt to find the strategy.
- its to find a specific behaviour where:
Market behaviour -> Repeatable pattern -> Positive expectancy -> Survives costs
My Simple takeaway:
Dont ask:
“What setup should I trade?”
Ask:
“What repeatable behaviour gives me an advantage and can I prove it statistically?”
That is where building an edge actually starts…
