Here’s a great quote, from a legendary trader with 30+ years experience…

It’s a great reminder that when it comes to trading, less can often be more…

“I get real, real concerned when I see trading strategies with too many rules (you should too)”Larry Connors.

But the question remains: What’s an acceptable number of rules?

We investigated this theory at our hedge fund and discovered that, surprisingly, strategies were perfectly fine up until 5 optimization inputs.

I understand that deciding how many rules and optimization inputs to utilize in a strategy might be daunting, but the goal is to strike a balance.

Too few inputs may not create enough of an effective adaptation to ever-changing market conditions.

On the other hand, too many inputs can create complexity and hinder the strategy’s performance.

Based on my research, the sweet spot is 3-5 optimization inputs, which allows for proper response to market conditions… especially when you’ve done a reoptimization.

Stick to this rule of rules and you’ll be as happy as Larry. :-)

Watch this video to learn more:


Happy trading,

DISCLAIMER: Trading involves significant risk of loss and is not suitable for everyone. People can and do lose money. Hypothetical results have many inherent limitations. Past performance is not necessarily indicative of future results.

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