I'm a bit disappointed with my first month performance, and I wanted to post some of my numbers to get feedback on what is good and what is bad. This will help me know what I should focus on to improve over this next month.
Keep in mind that this is 1 month of real time, but it is about 3-4 months of market time.
Here are my numbers
ROI%: 9.11% Win %: 38% Payoff ratio: 1.93 Expectancy: 9.76 # of trades: 336 Avg R: 0.28% Max Risk: 1% Avg Reward/Risk Ratio: 2.72 Max DD: -11.4% Avg DD: -3.96%
For those curious, I'm trading the NQ and currently on sim (~3 months of data).
Last edited by SoftSoap; March 23rd, 2016 at 12:49 PM.
Yes this is a serious question
I know getting free feedback is something that I shouldn't expect but I'm not asking for a detailed analysis, just things like "drawdowns are too much, or expectancy isn't high enough, aim for X expectancy" or something like that.
I know I'm not good enough to trade live yet but it's hard for a new trader to know whether or not they are on the right path according to their experience. When doing research online I find that the numbers that are posted (50+ expectancy, 80% win ratio, 30% monthly ROI, very high numbers) are all for professional traders and it's hard for me to benchmark myself on the first month of progress against a 10-year veteran.
So I'm seeking input on whether or not I should continue what I'm doing and tweaking small things as I go, or if I need a drastic revamp of my overall strategy.
The results above look like something from a back test. Either way 38% of wins is far to low for someone to make money from on an intra day basis. Personally I would want to see that above 80% before I would consider using it. Just remember in the real world you might not get that result as back testing on 3 months of data is more akin to curve fitting.
Correct me if I'm wrong but my understanding is backtesting is when you know the future and move back to see what strategies you could execute?
I'm using market replay data and playing it as if it was playing live, except I can fast forward so I don't have to wait 4-5 hrs for my target/stop to get hit.
Yeah I figured that 38% was quite low so I'm currently in the process of analyzing my losses so I can cut them in half at least to get me to to at least be positive. I'm finding that I always feel the need to be in a trade so I'm moving away from that, do you have any other suggestions as to big blunders that new traders make around always wanting to be in a trade?
My system is based around simple stuff. I just look at price, volume, and volume profile and start by looking at the big picture to determine whether or not the week/day will be bullish/bearish. Based on that I try and 'feel' when prices are too high / low and go the other way. Along the way I ask myself 'why' as much as possible so I can get a philosophical understanding of the market and its feelings, I treat it like a living thing.
It's not much of a science, it feels more like an art to me than anything else. I'm sure that as I learn more, it'll become more scientific.
Not sure if that's the answer you were looking for or not hah.
Just a quick thought from my own experience, I did much the same as you, I practiced in market replay to refine my entries and practice platform execution. But I found a huge difference psychologically when going live or even practicing on a live feed between the ability to speed up market replay and having to sit and grind it out over a trade moving back and forth before going to your target/stop.
It still represents one of my bigger struggles and is an area of improvement I am continually working on. If you are just scalping momentum then this might not be applicable for you, but if you are entering positional trades then it is worth practicing waiting now.
I am with amoeba, open a demo account with someone and practice on live data. Testing on fixed data is ok but the problem with that is, you can get up and walk away. Harder to do that with live data. Having to wait for trades (as you should) you also miss them as well so you have to factor in the probability of missing a trade. Minimising your losses is ok but you do not make money from losses. Focus on getting things right more often and managing the trade from there. Try and get the direction right at least 70% of the time. Remember even then not all of those trades will work either as there will be pull backs, random spikes and nerves all come into play. For me 50% of trading is managing the trade.
Always being in a trade is hard. I have never seen a system as such work but that is not to say one does not exist.