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The natural world tends to follow a pattern resembling a bell curve in statistics, where industries and professions undergo cycles consisting of initial, growth, maturity, and decline stages. This pattern is a law of operation that maintains a conservation state. Therefore, trends are only short-term crazes that will eventually be corrected by natural forces. Regarding the life cycle of a trading model, there are periods of profitability and loss along the timeline, and a trading model's expected value is either positive or negative during these periods. For example, the "breaking as trading" model was a profitable trading model in the early 1990s, but as trading shifted from telephones to computers, it lost its effectiveness, and by the late 1990s, it resulted in losses. Hence, the life cycle of this trading model was approximately ten years, based on the above definition.
To further complicate matters, the lifecycle of a trading model is not only affected by the external environment but also by the internal psychological factors of traders. When a trading model reaches its peak, traders are prone to becoming overconfident and greedy, leading to an increase in trading position size and the neglect of risk control measures. This behavior can cause the trading model's lifecycle to end prematurely. Therefore, in addition to determining the lifecycle of a trading model based on external factors such as market changes and parameter adjustments, traders should also pay attention to their internal psychological state and avoid making hasty decisions based on emotions.
In summary, the lifecycle of a trading model is a complex issue that involves external market factors, internal psychological factors, and the parameters of the trading model itself. Although it is difficult to determine the exact length of a trading model's lifecycle, traders can accumulate experience and knowledge to make better judgments. Additionally, traders should always pay attention to risk control measures and avoid making decisions based on emotions to extend the lifespan of their/>/>