Money Management

Having read several articles on money management, it really seems to be _the_ answer. Even though statistically professional traders experience more losing traders than winning trades, in the end, they come out as a winners.

Expectancy.

Suppose we have a system which works 40% of the time. On a 10k account, with an average loss of 2% and an average win of 4% means:
(0.4 * 400) - (0.6 * 200) = 40 net profit.
This can be done with percents too.
(40% * 4%) - (60% * 2%) = 40/100 = 0.4% = 40;

The formula:
(Win% * Win_average) - (Loss% * Loss_average)

However the trades go, if you follow your system, at the end of each day you should have a positive change in your account. This makes sense and follows nicely the casino analogy from "Trading in the zone".

From www.arbtrading.com:

Say you had $100,000 for stock purchases, and your expectancy was only 1.2% per trade but you turned over your stocks 250 times in the same year. This method ends up generating $300,000 for the year, and that assumes you never increase the position size as the equity grows. You just had a better year. And it is easier to get 1.2% per trade than 50%.

The bottom line for a great bottom line is:
A positive expectancy
A good number of trades
A short holding period

==

Well, I suppose WCCI just does that, it has positive expectancy, well at least woodie has. Quite a numer of trades generated over a day, couple that with more than 1 currency pair and you have a lot. And holding period around 1 or so hour.