Trade a lot or be very selective?

As discretionary traders, we must decide how we want to trade.

My process requires the identification of a trading "picture" with a high win rate and profitability.  I qualify the picture by first defining it, so I can back test it. Without first defining it, I can't test it. If I don't test it, I can't trade it, because I don't know in advance whether I will make money and whether I will have a high enough win rate - the main requirements for me.

But how restrictive do we make our definition? The answer to this question depends on what we want to achieve. Of course we want to make a profit every day, week or month,  but we have to be more specific.

I want a high win rate, I know that. But do I want many small profits, or do I want to be able to catch a trade that will give me a larger profit and not take lots of smaller trades? My picture definition has to be specific enough to meet my requirements.

How do I do this? Back testing. I know my basic setup, but I have to add context and nuances. The context and nuances will further qualify the picture to catch the type of trade I want to catch. Lots of work involved.

It's not enough to just show up.


Arrived in Chicago and looking forward to the training starting on Sunday.