Maira, just to find a strategy that can beat the spread and give you an edge over the market is very difficult. Stick to whatever makes you money. Aside try new things and tweak your proven strats.
A 65%-70% is good and remember, some of the demo accounts vary from a live account…
But still, good enough, track those trades and see if you can keep this up consistently. After a while, you can go live, but start small, pref micro account.
Hey Maira,
As yunny mentioned, if you have an edge in the market that you sure you can follow when you trade live, stick with it for a while. Please please demo trade for a little while though, or at least start trading live with a very very small account. Backtesting is very different from live trading. Also, some advice I wish I had received when I first started: keep a trade journal. Try making tweaks based on patterns you notice in your trade journal once you have taken a large number of trades (at least 20+ depending on how often you enter a trade). With a good trade journal and some real demo experience under your belt, you should be good to go!
SerenityFX
Wow 65-70% is good. How many trades have you backtested btw?
Yes, this is really the million dollar question.
When back-testing, sample size (the number of trades tested and recorded) really matters. The size of this sample can be determined by the time frame which you use for trading, but you should also consider different phases of the market cycle - try to test all of these phases to get an accurate and complete set of results.
I’m a fan of manual back-testing, and as a day trader I will always look for a minimum sample size of 500 trades - typically this equates to around three years of data. I’ll also test new ideas on 2008 market data (the initiating of the Global Financial Crash) to see just how well they hold up as the markets are falling to pieces.
3 years of data sounds solid mate, and I yeah its important your strategies are “crash” proof.
I agree with that. Find a strategy that works for you and execute it. I think that may be the toughest part.
There’s no reason why you shouldn’t trade it using demo now. After all, thats the step up from backtesting before you go live.
You can play in demo all you want as long as you know you do not trade or learn how to trade in a demo.
How will we know that this strategy is working for us. Ofcorse practice will tell us this thing. Now the practice should be done for 3 months at least and if the strategy fails, it will hurt.
You will only know if it works if you trade using it. What will work in theory may not work in practice.
I agree with this guy^^^
Since you’ve back tested 3 years of data, i don’t see why you should take your strategy out for a spin
Winning rate doesn’t matter if you make little on winning trades and lose a lot of losing trades. You can be extremely profitable with a 30% winning rate. The converse is you could lose a lot of money with a 60% winning rate.
100% agreed. A lot of newbies make the mistake to only focus on winning percentage which is very misleading.
65%-70% on regular basis with 1 : 1 is indeed a great combination. I would certainly love to have this combination in my trading strategy. In this way we can make a reasonable income on our trading account.
Why does it have to be 1:1?
It is not necessary for it to be 1 : 1, I just gave an example, You can raise the ratio as you like but this was the minimum what is requried to come out profitable in forex market.