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Stock Market Options Trading
3 Tips For Trading a New Strategy
Nov 1, 2022
Exploring the challenges of transitioning from research to execution in trading new strategies, emphasizing the differences between paper trading and real-world execution. Tips provided for navigating this transition effectively and managing confidence in live trading.
12:54
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Quick takeaways
- Distinguish between research and execution modes to prevent premature adjustments based on limited trade outcomes.
- Allow numerous trades to validate the strategy's long-term viability despite short-term outcomes not reflecting effectiveness.
Deep dives
Understanding the Normalcy of Tweaking Strategies
When starting a new trading strategy, it is common to make adjustments along the way, even for well-established strategies. Backtesting has limitations, and market conditions can differ from historical data. Transitioning from research to execution mode can be challenging, especially if initial trades result in losses, leading to temptation to alter the strategy. It is crucial to distinguish between research and execution modes to prevent premature adjustments based on limited trade outcomes.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode