: A system for measuring profits and losses relative to your initial risk (R), allowing for clear performance comparisons across different strategies.
: Use historical data and forward testing to ensure the system has positive expectancy. Trade Your Way to Financial Freedom: THARP - Amazon.com
: This includes your specific entry and exit rules, which are actually the least important part of the total system. Key Concepts for Success Trade Your Way to Financial Freedom
: Assess your personal strengths, weaknesses, and time availability.
: Use position sizing models to meet your specific objectives while staying within risk limits. : A system for measuring profits and losses
Tharp outlines a structured process to build a robust trading plan:
: Set clear return targets and maximum acceptable drawdowns. Key Concepts for Success : Assess your personal
: Tharp teaches that the true "Holy Grail" is internal control and a system that fits your personality, rather than an external indicator that never loses.