Oh there's nothing bad with that
What I call "unexpected statistical accident" is:
- never related to the size only
- totally independent of your good willing, or quality of your work
You'll certainly laugh about it, but the most fruitful day in all my trading activity was the day my first daughter was born. You are here close to your wife, and there is the machine that measures contractions and "beep-beep".
At the start, it is not really your preoccupation, but the "beep beep" caught my attention....
I was watching this thing, and watching again, until a point where I was able to predict wich type of spike will be the next, and it size, depending on the last sequence, and all the latest sequences together (is there an increase or decrease in speed between each complete cycle/sequence?If so, what speed? is the speed linear, exponential, random?
And I said to myself, s***t, that's it! That is what life is about!
- recurring patterns
- cycles (fractal sequences)
It is not about trading, it's about life. It's about the nature, and possibly every single thing in this universe.
From night and day alternance, to the growth of a plant, even your physical strength is constrained by this law of cycles / sequences, your mood, your life in general is constructed by some goods and some bads that you can establish in different areas, on multiple timeframes, from an hour to your entire life, and coming as (fractal) sequences.
example: you have an acident with your car, the same day you receive a fiscal stuff to pay (a thing that you totally forgot to pay 3 years ago... but today... it's YOUR day! )
I firmly believe that this very special day, I've leanrt more in 2 hours, in an hospital, than in 11 year I invest and trade actively, in the markets.
If you can identify the pattern, so you can manage the size of you exposure depending on the cycle and the speed.
Thta's why I prefer ton invest on $JGC, than any other super DARWIN that has only 6 months of history. I'ts because it has nothing to do with the performance or returns. It has to do with "can I predict the behavior, and if so, in what extent?
By answering these questions, you understand that it will be far more easier to take advantage of a $JGC, or a DARWIN that delivers zero return but evolve in a recurring price range, than any other excellent DARWIN but with a poor history yet.
For example, let's study $ERQ and $NTI. As an investor you will not apply the same frequency. Because if both can have the same behavio on a 1 month period, they are drawing a totally different pattern on the long term.
$ERQ operates with a succession of recurring short term cycles, while $NTI tends to behave like a stock index.
So... come back to $KVL now
Speed of the loss and size of the loss are equal components in my decision. They have to make an "average".
I mean by that, speed of the loss can compensate for the size, and vice versa. For example, if a DARWIN tend to lose 9% his worsts months, with an historical drawdown at 15%, and:
yesterday he has lost 3%, and today he loses 2% again, I can arbitrage it to play some volatility, because speed of the loss has compensated the size theoretically required to trigger an arbitrage.
As you've seen above, the "why" is not so important for me, as long as it is a recurring "natural" behavior, fractionned in sequences that I can clearly identify, into a global pattern.
I don't know if all those assomptions are a reality or an illusion, but at least, it is how I see things.
With Darwinex now, and DARWINs as tradable / investable assets listed on an exchange, a good trader should always be "happy to experience the "unexpected statistical accident" because prudent investors are stashed behind the bush with pending orders