How long do you test you Manual Strategy before going live?

How long do you test your “manual strategy” before you can say, “yup it’s working, I am going live now”?
I have started Demo account and I am going to use that same amount on the Real account. My entry and exits (SL/TP) are controlled manually (I am pretty much in front of the computer all day and if I am away from it, I have my phone connected to the VPS). Overnight trades are controlled with tighter SL or trailing SL. I don’t risk more than 1.5% of my account and my strategy allows me (so far 2:1 or higher ratio).

CROforce,

By experience (and I am only a beginner), SL and TP needs to be set even before you enter your trade so you avoid surprises.

As for testing, I would suggest backtesting your strategy on a demo account. Depending the timeframes that you trade, backtesting at least the past 12 months or until you have a sample of trades of at least 100 trades so you can have a good idea if your strategy is profitable or not. And when I mean profitable, it's not simply to know how often the strategy hits target, but how much pips in the end you make.

A strategy could be wrong 7 out of 10 times, but still be profitable if profits covers for losses and more. But that you will only find out with doing some consistent backtesting to have a sample of trade big enough.


Hope this helps

Personally, I took it about a week to test my trading system before applying it into live trading. And yeah, it depends on the trader itself, some took a test it for couple days and some took it longer...

florentnorroy posted:
CROforce,

By experience (and I am only a beginner), SL and TP needs to be set even before you enter your trade so you avoid surprises.

Thank you for the info and I agree with SL/TP... My are well determined before my entry. I have created my MM 'system' in Excel which tells me my RR ratio, and lot size to avoid going below 1.5%.

Samsu_samsul posted:
Personally, I took it about a week to test my trading system before applying it into live trading. And yeah, it depends on the trader itself, some took a test it for couple days and some took it longer...

Thanks for the info... I did some back testing (paper trading) and I am comfortable with results. I was thinking to do the demo as a forward testing until at least 30-50% in plus before going live.

sometimes trading on demo is purely waste of time while manual trading because manual trading needs to have the money on the line to bring out the best of our emotions. Trading is often an emotional roller coaster unless you can trade without any content of not making a profit.

Since the system is manual , you can't backtest the system over data, so you'll need confidence, patience and plenty of risk capital to actually trade live.

Testing is also about building confidence in your strategy as well as proving it works over time. If you go live with your strategy right now and have 2,3, or 6 losses in a row, would you be confident enough to say whether it is or is not working as intended? Is that an acceptable drawdown, just a crazy week in the markets, or does it mean you should find something else? You need to know your strategy inside and out and what it's weaknesses look like in order to avoid the psychological mistakes of throwing away a good strategy or sticking with a losing one.

socks posted:
Testing is also about building confidence in your strategy as well as proving it works over time.

That's why you need to test it first, building your confidence with your new trading before putting it into live trading. Just make sure you get 30%-40% gain in demo account when testing your strategy and you're ready to go...

when you feel very confortable and ready to accept losses

RedRhinoFX posted:
sometimes trading on demo is purely waste of time while manual trading because manual trading needs to have the money on the line to bring out the best of our emotions. Trading is often an emotional roller coaster unless you can trade without any content of not making a profit.

Since the system is manual , you can't backtest the system over data, so you'll need confidence, patience and plenty of risk capital to actually trade live.

I treat this 'dummy money' as my own capital with a goal in mind. Every loss I take put's me further away from my goal. I do go back and analyze my trades (good or bad) and take it from there to learn what I did right/ wrong.
I still go through emotions but I stick to my strategy and I watch price action, market movements and news affecting currency I am trading. Sometime I would leave the trade open to hit my TP while moving my SL to protect my capital or I would simple exit the trade if I see that things are shifting in wrong directions. With all that in mind and as you said above, I can't 100% back-test manual trading and that’s why demo account is needed. I am not going to risk my real money to test the strategy to prove it whether it works or not. This is more of a strategy test and to build a confidence level as “socks” has mentioned above. So far, I am happy with results… whether this was lucky streak or not, the time will tell but my goal is to go to at least 30% before I put real money on the line which again is going to be small account to start with and I can always add to it later.

socks posted:
Testing is also about building confidence in your strategy as well as proving it works over time. If you go live with your strategy right now and have 2,3, or 6 losses in a row, would you be confident enough to say whether it is or is not working as intended? Is that an acceptable drawdown, just a crazy week in the markets, or does it mean you should find something else? You need to know your strategy inside and out and what it's weaknesses look like in order to avoid the psychological mistakes of throwing away a good strategy or sticking with a losing one.

Well said... I couldn't agree more 😎

luthfi_maung posted:

socks posted:
Testing is also about building confidence in your strategy as well as proving it works over time.

That's why you need to test it first, building your confidence with your new trading before putting it into live trading. Just make sure you get 30%-40% gain in demo account when testing your strategy and you're ready to go...

Thank you for the input. 😎

My plan is to be in this for a “long haul”. I am not looking for HUGE % return and 'get rich quick', but to build my account while compounding. 5% a month could take you long ways. I have steady good paying job and planning to keep it that way.
Forex is just something on the side… If it works as planned, it would be my “retirement savings 😎” but I don’t plan to make forex my main income. That's why low Drawdown (currently 7.4%) is important to me. Risking only small % while looking for bigger profit. I've done EA's before but they are all (at least the one I had) Drawdown suckers. Small and steady is my approach.

CROforce posted:
How long do you test your “manual strategy” before you can say, “yup it’s working, I am going live now”?
I have started Demo account and I am going to use that same amount on the Real account. My entry and exits (SL/TP) are controlled manually (I am pretty much in front of the computer all day and if I am away from it, I have my phone connected to the VPS). Overnight trades are controlled with tighter SL or trailing SL. I don’t risk more than 1.5% of my account and my strategy allows me (so far 2:1 or higher ratio).

You can always start a live account with the minimum and test your strategy,if it works then you can increase the amount. Demo is fine for learning how your platform works,but live is a totally different ball game.Be careful with over night positions,it has to be a guaranteed stop loss,even then expect slippage.Trailing stops are not a great idea because of spikes ,but that's your personal choice.Hit the markets when their most liquid to give worthwhile trades.Don't limit TP but do get an idea of how much your product moves in normal conditions.

be lucky!

snapdragon1970 posted:

CROforce posted:
How long do you test your “manual strategy” before you can say, “yup it’s working, I am going live now”?
I have started Demo account and I am going to use that same amount on the Real account. My entry and exits (SL/TP) are controlled manually (I am pretty much in front of the computer all day and if I am away from it, I have my phone connected to the VPS). Overnight trades are controlled with tighter SL or trailing SL. I don’t risk more than 1.5% of my account and my strategy allows me (so far 2:1 or higher ratio).

You can always start a live account with the minimum and test your strategy,if it works then you can increase the amount. Demo is fine for learning how your platform works,but live is a totally different ball game.

Technically, demo and live account are the same thing. But some bad broker modified demo account so they would likely 'bait' their clients.
But the thing to remember is, don't let yourself hanging in demo account for long time.

All good and valid responses... Thank you much

Testing a strategy requires time to build your own confidence in it and to see the results it gives under different conditions. Personally I would say that takes between 3 to 6 months at the very least.

Hello people ,as a new trader i opened a demo account and i want to open a live one but im not sure when is the right time to do so,i assume the criteria for opening a live account its not how long i had the demo account but how much knowledge i have ,can anyone give me some tips regards this issue?thank you

Personally, I am satisfied after about a month of testing. Sometimes it's obvious it's not working out after a few days though.