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The correct order

  1. Risk
  2. Exits
  3. Frequency & exposure
  4. Entries
  5. Parameters
Changing parameters before risk is a mistake.

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Why this order works

1. Risk Start with position sizing, stop loss, and exposure. If drawdowns are unacceptable, no entry logic will save the strategy. 2. Exits Exits define how trades resolve. If exits are vague or inconsistent, optimization only amplifies noise. 3. Frequency & exposure Too many trades or too much time in the market can distort results. Control the behavior before fine-tuning entries. 4. Entries Only once behavior is sane should you refine entry logic. 5. Parameters Parameter tweaks are last. They are least meaningful without a stable base.

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Quick example

If a strategy loses money but has good entries, the fix is usually risk and exits, not a new indicator.

Improving a strategy

Parameter ranges

Overfitting & guardrails

Common pitfalls