Optimizing Position Sizing Strategies and Trading Risk Management
174Optimizing a position sizing strategy to manage trading risk can be challenging, and a detailed analysis of return and drawdown percentages is required to achieve an optimal strategy suited to the personal objectives of the individual trader. However, an important consideration is that production drawdown will usually be greater than that experienced in backtesting, while the return will usually be less, due to the effects of over-fitting (even when measures have been taken to reduce over-optimization, this will always creep in, to some degree).
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This is Episode 36 in the Darwinex 'Spotlight on Trading Indicators' Playlist: https://www.youtube.com/playlist?list=PLv-cA-4O3y97HAd9OCvVKSfvQ8kkAGKlf
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