hi guys
not a rant thread dw, just not sure if its the lack of socialization due to the virus, but these last 2 days ive been feeling terrible trading wise (still learning/demo) and all of a sudden trading is feeling something of an enormous low-rate-of-success. How do you deal with such days? I know I should take a brake or something, but break-time feels a bit waste of time since I want to progress further.
Currently my stats of backtesting are just about 1% to 2% a month. How do you see such result for a beginner? I’m trading on daily/4h charts so its not like there will be a ton of opportunity with my setup.
Any consistent profit is good for a beginner - BUT, examine your strategy and calculate / back-test what profit it could in theory provide per month. I’d be amazed if you are running it at 100% efficiency so it has no more room to be developed / improved.
If your strategy cannot provide (in theory) +6% profit per month, without increasing risk past your maximum, you need a better strategy.
2% return is by risking 1% of capital. I never knew about the 6% benchmark, and it makes sense since, as I suspected, 2% is kind of too weak to be consistant profitable.
can you please elaborate a bit more on your reply cause it feels like it can widen up a bit my view of how to backtest/improve. I still kind of suck at backtest since I can’t get to write black on white rules of when to enter exit. Being based mostly on price action and S&R most of the times its a bit like “it looks right”. Average win rate is about 50% which isnt really imrpoving my esteem since any one starts off at 50% right of the bet (you know, you either win or lose)
The 6% per month rule is my own conclusion - this represents a 100% profit per year if you compound your returns, never drawing out any profits from your account over the year.
This parallels the r:r rule for an individual trade - you hope for 1:2 or better but you never take a trade that would give less than 1:1. Therefore, the same rule should apply to strategies - you hope for 1:2 or better but you never accept less than 1:1. Since it is very common that new traders go bust in their first year, your strategy must be capable of giving more then 1:1 per year. If it physically cannot do that, don’t trade with it.
Lee, check out these market structure trading videos. It might help you to improve your win rate. He also does videos on chart patterns which I’m not really a fan of but his structure based videos are well explained and easy to understand.
Hi mate, not sure what you mean when you say you’ve been feeling terrible trading wise. As far as I can tell you, to trade consistently long term there should be no feelings involved. Are you using a mechanical or a discretionary system? I will second that 1-2 % a month is not good enough and you should not put real money in the line. Think about it, on 100k account you’ll make 12k to 24k a year. Can you survive on that? I do 4% a month consistently, and have done it for a few years. Keep testing your strategy and tweaking it till you have a better return. Good luck.
Hey Mate ''feeling terrible ‘’ to me is a sign that you are using a high risk.May be you should Consider using lower risk then tighten your money management.After setting up your trade, please consider staying away from the screen and wait for the outcome of your trade.
When I said feeling terrible it’s more like frustration than anything. Mainly because I know that there’s a ton of opportunities in the market yet i’m stuck with a 1-2% return a month when/if profitable no matter how much i read, study and backtest.
@tradeforex077 My system is half mechanical half discretionary, like I have a generic criteria of S&R but then it depends on candle sticks and moving averages at most to decide if i get in or not. So nothing really written in stone
@QuadPip thanks for the link, will start watching the vids and hopefully put some light on new methods