After 3+ years of trading stocks with buy and hold strategy.
After 1 year plus of learning and developing my own forex trading plan/system thru dozens of books and of course babypips school.
My system’s “Backtest + demo” result are out as below, kindly note that the result has been realistically/ pessimistically adjusted to more accurately reflect live trading through adjustment of entry and exit price.
[U]MTS V2[/U]
Mon-Fri, GMT 8/9am-4 pm, 15 mins timescale & no overnight holding.
Risk per trade: Max 1.5% with auto tier reduction/increase basis current vs peak account
Pre-defined stop loss for every trade.
EURUSD pair looking at 3 moving average, RSI & ADX. The system will give entry/ exit signals basis criterias.
Monthly results;
Average Trades: 26
Average Gains: 10.68%
Average Loss to Risk Ratio: 0.639
Average Gains to Loss Ratio: 2.067
Total Win Rate: 44.87%
Total Long Win Rate: 38.64%
Total Short Win Rate: 52.94%
I know my results are not fantastic but would like to know you guys’ opinion on it and whether anything else i should calculate or know.
I think your results are not bad at all. You just need to be very consistent. 10% monthly gains are not astonishing but it is definitely something to start with. Maybe you will be able to tweak your system over time. Try to figure out how to reduce your loses. Find a way how to exit a losing trade sooner.
I think it also looks good. Is this just one month of backtest? If it is I would suggest that you backtest a few more month to get more accourate results. Overall it looks good imo. No unrealistic goals and some good results.
I agree with both responses so far, but would go stronger on isildur’s. If you can average 10% a month going forwards then you have completely cracked it. Compounding will, at some point, bring most accounts up to five or even six figures. 10% of that every month is plenty to live very nicely on. So even if it takes a few years for the account to grow, don’t think that if you fail to do better than 10% pcm that you are not doing well as a trader. But as SagiCZ says, I would want to see 10% a month for many months before I trusted the strategy to give that in all markets. Sounds like a good start, though.
@SagiCZ: Yeah, i am trying to compare whether trailing xATR will be able an improvement from the current moving average exits.
@isildur, SimonTemplar: The results are from Dec 2010- Feb 2011.
Actually to be even more realistic, i am looking to achieve at least 75% trading efficiency for at least the first few months and so looking at returns of only 7%. One more thing is that my system requires at least 1-2 good 100+ pips trend movements per month to achieve the result. And looking at the daily ATR bar which is around 120 pips- 150 pips for EURUSD, is it a realistic expectation??
I know but it just amazes me that even though 90% (Or whatever you believe) of people fail, apparently 10% a month isn’t astonishing. Providing it’s a [U][B]consistent [/B][/U]10% a month, that’s all you need
I think a lot of the 90% fail because they think that if they aren’t doubling their money every month or two then they are failing, so they either overstack the risk or overtrade, both of which lead to busted accounts. Seriously, if I could guarantee 10% a month now for life I would sign on the dotted line and smile while doing it.
I think I agree with the bolded text only to some extend. I think most will not trying to double their account, they are just not patient enough to give their account room to grow in a reasonable time within a reasonable speed.
I think about it this way:
If someone has lets say 2k to trade. He makes 10% per month and this is only 200 bucks. He cannot live fom this money. So to make a living he has to trade more with more risk involved to make reasonable money to live on. So I think it´s not doubling it´s just expecting too much from a small account.
Okay, I was using shorthand, ‘doubling’ was just a lazy way of saying that they try to rush along the profits from their account too quickly. Noone can make a living from Forex until they know what they are doing and their account is large enough, just like any career it takes time and commitment. So I agree with you. Patience is key, both at the broad brush level and within each trading day.
With regards to starting with 2K, just think about how many other businesses can you start up with 2K and make a profit straight away. Any start up business needs supremely hard work to get going so as well as forex, you could be working evenings & weekends (If you’re trading during the day) to keep the money flowing in… That, or just start off with 100K and make 10K a month
If I would consider investing my capital as your trading capital base to trade of I would say to you…“Please do it again and use a proper financial quarter”. And do not use Q4 because of years end book squaring".
Also…please don’t use a sub hour tf as your home tf. And whatever you do…please don’t use indicators and squiggly lines.
You will never be able to catch those 120+ pips moves (you are talking about) a couple of times a month on a sub hour tf with indicators and squiggly lines.
Better use 1h, 4h, 1d, 1w (your choice…I’d use 1h for home tf) and sub hour tf’s for entry/exit and trade management ONLY.
I am sorry about this but it might save you years of your precious time.
Ermm… My results are “suspicious”??? What to you mean by that? I checked my excel figures quite a number of times going through the entry, SL, exit and various others couple of times. Didnt find other typo which may affected the result.
If we omit Q4 data, doesnt that make the figure inaccurate since we will certainly be trading in Q4? Or do u mean need to include other Q datas to make the figure more realistic and robust?
Squiggly lines??? Sorry i am still noob at this but what does this mean??
I would not take it personally - coxsonne sees conspiracy theories everywhere. I have a lot of success with Moving Averages, personally, I find they really help, so don’t be put off, just keep testing and tweaking. Most trading styles evolve over time, in response to success, failure and more learning.
-_- … phew… and i thought something was wrong with my figures.
Alright i will try to include earlier figures for backtesting but that will be a tedious process so will take some time since i am not using backtesting software and only using excel. Anyone have any source for free CSV forex figures?
Oic… I understand too from many books/website that ultimately using price action is the way to go but i suppose i am still relatively new in forex and i m not that smart to immediately grasp the market through price action alone but i am concurrently trying to “demo” trade in my mind as well basis purely price action to better grasp the market.
I am a price action trader myself and I really like it. But I think just because I am using price action doesn´t mean you should use price action. It´s just another way to trade. It has it´s advantages and also it´s flaws.
Every trading strategy works if a skilled trader is using it. So it really doesn´t matter if you are more in favor of price action or indis. So go with your feeling, what you think is right for you.
Hi MC, my advice, stick a grand in a micro account and trade your strategy for a couple of months, only then will you have a result worth talking about, otherwise IMO your wasting your time. You want to be a trader?.. then trade, you’ve got 4years experience what are you waiting for? stop fannying about with backtesting and demo, your kidding yourself.
Most people on here wouldn’t know a good strategy if it landed in their lap, prove it to the only person that counts… you.
