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Is this to be expected?
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Is this to be expected?

  #1 (permalink)
Elite Member
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Is this to be expected?

So please be gentle I am still extremely new to trading

Okay so I've been practising in sim using some really basic price action analysis and some indicators (MACD, stochastics RSI, and vwap) to look for break outs in ES, basically to summarise it I've been able to get a 50% return in 4 days. This seems a little crazy but I know the futures market has this kind of leverage. As well I know it is Sim so basically It's not to be expected that it will fill like it does and that there is no real psychology at play.

Pretty much I guess I'm asking if this is what some people have or if this is unrealistic. Also, this is with a trading 5 contracts with a 30,000 sim account which I've brought up to something like 69,000. If people need any more info to answer this let me know happy to provide it.

(also would this belong on the ES page or here?


Last edited by Nicko1994; April 4th, 2018 at 09:05 AM. Reason: Grammar
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  #2 (permalink)
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  #3 (permalink)
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with a 30K$ account, a rule of thumb should be not to risk more than 2% of the account on a single trade
with 5 lots, that brings you to a stop of roughly 10 ticks

more important is the measure :
win/loss ratio
target/stop ratio

liquidity on ES is good
so fill should not be too much of an issue
even loosing 1 or 2 ticks on fill and slippage will not break you

does that make sense ?

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  #4 (permalink)
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Nicko1994 View Post
I've been able to get a 50% return in 4 days.... I'm asking if this is what some people have or if this is unrealistic. Also, this is with a trading 5 contracts with a 30,000 sim account

First, on sim -- it means nothing really, and I say that gently to the majority of people on this site likely being sim-only traders. It's like a fun video game. But it doesn't make you better where it counts--making money. What it DOES do for you when you're brand new is it gets you comfortable with your software, and gives you some idea of how you want to approach trading in general. This is good. But to do it for more than a few months like some do is simply a waste of time.

And no, your results are not normal (they're not even real, as you said), and are in no way sustainable, and are in no way repeatable. Perhaps you have benefited from increased volatility and you've been right, which is great. Some days will yield directional opportunity; other days the market goes nowhere and it's tougher. Either way, a 4 day sample size is small enough to fall under the "random" umbrella.

During current levels of market volatility, 5 ES contracts on a $30,000 account is simply too high. Think about it this way--you enter a trade with 5, and ES moves against you 3 handles almost immediately. That's $750 gone, which is 2.5% of your account. When big money managers risk 5% on a trade, they're swinging and not playing intraday, where IMO anything over 1% on any given trade is just too much to risk. Even with 1% risk, you make 4 bad trades and you're down 4%, which is a LOT.

So yes--in short, your results thus far are to be commended, but you have what is called "beginner's luck" and given that it's not real money anyway, it doesn't mean much. I don't mean to be a wet blanket, but I'm answering your question truthfully.


rleplae View Post
with a 30K$ account, a rule of thumb should be not to risk more than 2% of the account on a single trade
with 5 lots, that brings you to a stop of roughly 10 ticks

The OP should be aware that a 10 tick stop on days like today with a 320+ tick range is pure madness, if indeed the strategy is to use a hard stop, particularly trading 5 contracts (too much) with a 30K account.

This is the trap most people fall into -- tight stop, overleveraged, 2% risk on a single trade ... it blows up eventually. I trade CL and I rarely let it go more than 10 or 15 ticks against me, but that has to do with my particular strategy, and I don't use a stop anyway--my point being that individual circumstances will dictate some of this.

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  #5 (permalink)
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ES jerks 5-10pts as fast as you can blink your eyes these days. With current volatility, I think max 2 lot is plenty enough to handle with (imho 1 is good). As Josh mentioned, i don’t think you can put a tight stop unless you don’t mind being wrong often. But it’s up to you I guess, good luck.


Last edited by rintin2x; April 4th, 2018 at 11:21 PM.
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  #6 (permalink)
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Sim is for learning how to use the software and the instruments you want to trade. Stay on sim and play every scenario. Ride the winning and losing trades so you can see how much you can win or lose. Then do the real business of trading with real money.

Sent using the futures.io mobile app

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  #7 (permalink)
Market Wizard
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The volatility/range lately makes for some exceptional profit and loss opportunities. However, you must use a realistic fill engine if you are using limit orders or even if your average trade is small. Rithmic simulator is very accurate and their simulation technology is used by most future firms offering tryouts but unsure if they make it available to individuals. You also need some a reasonable daily loss limit from 2% to 5% would be considered reasonable by many.

As another said, your results are not interesting and it sounds like how you obtained them is less so. The future is unknown. Most traders will lose their entire accounts in under 6 months or stop trading. But let me add, even if you made 50% or 100% in a week in the live then it would not be interesting or surprising without knowing your risk metrics and without having some reasonable amount of data over some months at least. If you can make profits with controlled risk over time under realistic conditions in the simulator then it becomes more interesting. If you can match in live over reasonable time, minimum 3 months, then you might have something. Keep in mind even 3 months is a very short track record unless you are posting huge numbers and scalping many trades per day.

I am not sure of your trading background but if you are just trading a random set of indicators then I would strongly suggest you gain a lot more experience before going live. Traders trade all sorts of ways. But, most either have systems or extensive experience for discretionary traders. If you are trying to trade simple rules based approach without expert knowledge or verifying it then I think you are unlikely to do well. It is not really a question of your indicators but your understanding of them, how markets work (non stationarity), etc.

I disagree that sim trading is a waste of time. There is no reason to risk your money in the live markets unless you are solid in the sim. However, I agree it is a waste of time and counter-productive to sim beyond a certain point if you are posting good numbers. If you change your method it can make sense to go back to simulator. Trading without a stop is basically gambling. Everyone has a stop but some just don't accept it. If you're going to put a stop on the size of the daily range then it is still a stop. But small stops are extremely difficult and can introduce fragility. Good luck!


Last edited by tpredictor; April 5th, 2018 at 07:46 AM.
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  #8 (permalink)
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Firstly thank you all for the replies I am grateful for them, I see a lot of people pointing at the inexperience haha which is definitely right, and also why I am not throwing any money at live markets for some time yet. So some of the main things are trade smaller amounts, build consistency and understand a lot more about how I am trading and what I'm using in the relationship between indicators etc etc.

I have a few questions though, is it possible to trade and attain results like that, has anyone or does anyone know anyone, this is just curiosity, I don't really set a goal for returns or anything at the moment just something I wanted to know

So yes--in short, your results thus far are to be commended, but you have what is called "beginner's luck", I was thinking it might have been this, You don't have a hard stop Josh but if you where to have one where would it be if you where trading for example 2-3 lots?

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  #9 (permalink)
Market Wizard
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Nicko1994 View Post
basically to summarise it I've been able to get a 50% return in 4 days.

...

Pretty much I guess I'm asking if this is what some people have or if this is unrealistic.

(also would this belong on the ES page or here?


Nicko1994 View Post
I have a few questions though, is it possible to trade and attain results like that, has anyone or does anyone know anyone, this is just curiosity, I don't really set a goal for returns or anything at the moment just something I wanted to know

First, welcome to the world of futures trading.

Second, no, 50% return in 4 days is not sustainable. Calculate how long it would take, at that rate, to make a billion dollars. A few months? Then think about how many billionaires you know, and how many people have gotten very wealthy almost instantly....

What you're doing is fine, though. You can work with sim for a while -- you will probably want to cut back your sim "risk" exposure -- until you feel you have a sense of the market, and have had both more successes and some failures. At some point it will be important to actually put some risk money into live trading. Be aware that too much time in sim with no real exposure to gain or loss will just get you used to playing with play money.

Once you have something real at risk, the major learning will begin. Don't put any money into it that you're unwilling or unable to lose, because the near-universal experience is to lose a bunch of it before you win.

Good luck, and don't get either over-confident or discouraged.

By the way, the Beginners and Introductions forum is probably not the best place for anything other than a pure personal introduction, to get your feet wet in posting. I suggest you look around for another spot. See where others are posting and try it there. You can ask the moderators, @sam028 or @Big Mike, to move the thread, or just open a new one in another location.

Bob.

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  #10 (permalink)
Market Wizard
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@Nicko1994 If you know when to stop, possibly but think about it, if you could even half-way consistently make 50% per week then there is no chance you will know when to stop. There is no return in trading, the future is unknown, most will lose but the sky is the limit. Why no return? Think about how it sounds, "return". If I think about a "return", I'm thinking about something above and beyond my principal. But, in trading you can lose your entire account (and in some cases more). So, there is little reason to compare the returns from well-rationed investing to trading with high leverage. If you want to think about "return" though, you might want to consider that traders who have invested at least a decade of near full-time/work study might seek to return 100% in a year day trading risking only 3%-5% per day.

There is something else to think about. Nobody wants to trade because it is risky. A rational trader will only trade if they can make a very outsize return. You can lose 100% of your account. So, what should your goal be? At least 100%. So, if you want to think about how much it is possible to make: a lot because nobody wants to take that risk.

Regardless of your personal way of viewing things, your profits are determined based on how accurately and precisely you can predict the market. So, to make an outsize return: it is not good enough just to be accurate but you have to be precise. The precision determines how much you can leverage your account. Think about it this way, if you normally can capture 2 points risking 2 points then that's 1 R trade but it also determines how much you can risk on that trade. The difficulty is small changes in precision can dramatically impact your results: really small mistakes of any sort. But, let's go with this, let's imagine you figure up you can make 400% if you leverage each trade to the very maximum. Sounds good but let us imagine the market changes just ever so slightly so that you require a 4 point stop loss to reach your target. That's not a big change but it could be enough to turn your winning method into a losing method. Of course, if you had built in some leeway from the start, it wouldn't matter but your return would "only" be 200%. What do you think will happen if you trade a method that can only return 200% with leverage to make 400%? You risk losing the entire account. You could have made 200% but instead you lose 100%. Some traders try to get around this by not using stops or only using catastrophic stops: it is much easier to hit big numbers playing that sort of game. But, you will risk losing either your entire account or a significant portion on any single day. But, let me just add the precision is always unknown and moving. This makes it extremely difficult to hit your theoretical peak return. One way to think about it, let's imagine you are willing to take a 50% loss on your account and in one year you made 30% with a max loss of only 10%. So, you could say well I could have made 150% that year but the next year you take 50% loss with a return of 50%. If you traded at the higher leverage, you would have gone broke the next year. Moral of the story? Over very short periods, outsized gains are possible but over time it becomes more difficult.

A lot of traders talk about statistics/etc. but think about this, if the market is efficient then being able to consistently profit from a method is less likely then being able to opportunistically profit from some methods. That's just another way of saying that if you insist on statistical evidence, you are imposing a greater requirement against efficient markets. But, if we're talking about opportunistically profiting from markets then the whole notion of return goes even more out the window.


Last edited by tpredictor; April 5th, 2018 at 02:47 PM.
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