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).
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).
Success is not final, failure is not fatal: it is the courage to continue that counts
Dec 08 2015 at 08:48
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
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
florent.norroy@
Dec 08 2015 at 15:10
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%.
Success is not final, failure is not fatal: it is the courage to continue that counts
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.
Success is not final, failure is not fatal: it is the courage to continue that counts
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.
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.
Dec 09 2015 at 13:58
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...
Dec 09 2015 at 15:21
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.
Success is not final, failure is not fatal: it is the courage to continue that counts
