I spent a few days mulling over returning to a 33% Kelly money management system. My Monte Carlo simulations make it look so alluring, even though I can expect significant drawdown. Yesterday I decided to return to trading at 33% Kelly for my next two trades, both of which lost.
I lost around 18% of my equity, according to MT4. It was a huge hit, although I'm still in profit since ineption.
What was my emotional reaction? My reaction to the loss itself was quite muted. However, I can feel a loss in confidence when contemplating the next setup at the same risk level.
I would love to continue this sort of money management style, but intuitively I feel I'm setting myself up for a fall, probably due to unforeseen, unmanaged risk.
Well, the good news is that trading at 1-2% makes it alot easier to manage simultaneous trades.
I believe my risk profile is very high. I just need to find the right balance.