“what doesn’t kill me, makes me stronger”
Friedrich Nietzsche.
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a backtest will tell you what was your profit/loss/equity and win/loss ratio, etc, while trading some period of time from the past…
…but it does not say anything about what will happen when trading live…
you can quote me on that.
I think its time to go back to demo for a bit. Its not quiting to trade on demo.
Yes but this is the problem every combination has a specific end result and these are not even all the input values.
The hedge funds I was talking to didn’t have any clue that they could only pinpoint one single output (UHN → VHNW/UHNW) with an 80% risk to capital (it was crypto - via arb - so their fund managers didn’t care).
If you’re trading $1,000 units (not capital but unit size), and want 150%pa net return you are risking 99% of your capital, not drawdown because anyone who knows how the markets really work don’t worry about that number, profits come and go but preservation of capital is key.
Even 2&20 hedge funds only target 20% risk to capital which is why they always underperform at 13% net, you have to spend all those days, weeks, months, years finding the exact combination that works for you which is why no one ever talks about it, because they only know what works for them and only them!
That is alarming. 11 losing trades in a row is a clear indicator that something is wrong with your strategy.
It is good that you have taken a break, and the fact that if you trade you would have a streak of three winning trades won’t change a lot.
I suggest you reconsider and sharpen your strategy.
The most common mistake for this long losing streak is that you don’t give enough room for trades to perform if you use stop-loss orders.
Consider reevaluating your strategy for placing the SL orders.
Use the ATR indicator, usually, this is a good indicator for calculating the levels of your SL order. It works well for me. Use the ATR number of pips, add a couple of more pips, and calculate what level it would be from the price when you entered the trade. With this, you will give enough room for your traders to perform.
If such a large number of trades in a row are unprofitable, then simply resting and then continuing your trading will be the wrong step. You need to change something in your analysis and trading strategy. After all, it is she who gives so many wrong signals. You need to analyze your unsuccessful trades and identify their reasons, change something in your strategy and try to improve it. Or change the strategy.
