To The Moon

got some excellent queries on the requirement to maintain the performance for much lower trade frequency; the lower the frequency, the higher the expectancy value is required of your trading.

Yesterday's 35 trades average per month example will equate a trade 'Expectancy' of 0.65R per trade

Expectancy per R = (win rate x Avg R Gain) + ( (1 - win rate) x Avg R Loss).

To churn a 6% avg monthly return to compound beyond 100% annualized return at lower trade frequency will require higher trade expectancy more than 0.65R per trade. I will further reduce 35 to 20, this is 40% reduction in trade frequency.

eg. Reduce '35' trades avg per month to '20'

since per R is 0.3% risk in my example. 6% monthly compounded return will require 20R. 20 R / 20 trade = trade expectancy of 1R per trade (up from 0.65R from reduced trading frequency). There are basically 2 ways to improve the trade expectancy from 0.65R to 1R;

A. Improve Win Rate from 25% to 34%, maintaining all other metrics

B. Improve Avg R Gain (your avg winning trade R per R risk from 4.3R to 5.6R, maintaining all other metrics, including 25% win rate.

The above performance will nett you an annualized compounded return of 100% (PS: earlier example is *114%)

What I hope you take away from this is that trading proficiency hinges on the law of large numbers. There are 6 core variables that you should regularly track, dissect, investigate, and refine each month through your journal;

1. Know your trade frequency - Adjust it to aligned to your lifestyle for longevity. Be conservative with this number because there are months that market may not present you even 70% of that mean value. eg. Recent June 2025 for me presents very minimal momentum opportunities)

2. Win Rate % - 2 way to improve win rate% is actually by i) situational awareness and your read of the market. always key in the date of your executed trades and review them a month later to see where u executed those trade relative to where the major index is positioned, specifically the losing trades. ii) stop trading setup that are already extended. stock are extended not by eye, there are quantifiable metrics to measure them objectively eg. historical ATR% multiple from 50-MA. I personally do not trade, or add setups beyond 4 x ATR% from 50-MA, and it saves me a ton of stop losses.

3. Avg R Gain for winning trade - refer to 5. below because time is essence of profit expansion.

4.Avg R Loss for losing trade - Create a way to reduce the regular stop losses from -1R into -0.7R. You may wish to read up about my 3 stop strategy, I have earlier designed a methodology to control my full stop losses at a neat -0.67R after cost. Avoid slippage cost by trading extremely liquid names, and avoid trade execution 1-2 day prior to potential pre market gap event (8.30ET data, and add more days buffer prior to stock earnings especially)

5. Holding period for winners (you need to stretch this as much as possible, profit expansion comes with time. you need a sell rule that will stretch your holding period even on the smallest size after multiple profit taking)

6. Holding period for losers (reduce this, cut loss short allows freeing up capital for opportunities you weren't able to capitalized if locked up)

With the above, i am pretty sure you will be focusing a lot on stocks with higher ADR% and extreme liquidity.

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