After spending the last few days back testing various strategies with varies setups I’ve finally found something that “works”. But I don’t know if this is realistic or not.
You can see I’m making a lot of PIPS but it takes a very long time to get those pips with the average trade being 27.9 days long… I’ve only tested this with 4 pairs so far and I’ve tested this using 2000 data, 2008 data, 2012 data and 2017 data and it’s working.
I’ve also chosen some random length days ranging from 333 to 629 and tried to keep the amount of trades per pair around the same length.
But when I take into account the rollover fees from holding these trades for weeks, as well as the initial spread (which isn’t much but it adds up), I’m wondering if ~23.9 pips a day is enough to make this a viable career option?
The actual profit will probably be more along the lines of 15 - 20 pips after fees I’m guessing.
To the best of my knowledge, it is pretty normal to receive a salary once a month. With an average trade time of 27.9 days, you would be getting paid within the month, on average.
Based on your projections, How much does each pip have to be worth to make it a viable career option for you?
It is not only about the pips you make, it goes deeper than that.
If you were a scalper, setting stop losses of 5-10 pips, with a profit of 23.9 pips per day, you would be a millionaire within a year.
I see you are a long term trader, not just for the number of days you hold your positions, but also the average loss. Some trades have a loss above 200 pips.
Think about this.
Let’s say that you set your trades in order to lose 1% every 200 pips.
In this case, 23.9 pips per day would be ~0.12% per day, on average.
We have roughly 250 trading days in one year, so you can reasonably achieve 30% per year.
In my opinion, 30% per year is a great return, if you can keep other parameters under control, such as risk and variance.
From your screenshot, in my humble opinion, I see that risk and variance are not under control.
You would have a pretty big drawdown with the losses on EUR/CAD and EUR/CAD. In addition, they come all at once, just like the first period of profit.
To answer your question: yes, this profit is enough for a trading career.
Other parameters might need a viable idea for optimization.
Thanks for the explanation, I should point out that the losses and wins do not happen like I have posted them. I simply backtested all my wins and noted them down, then back tested all my losses and noted them.
That is why you see them listed all wins, followed by all losses. Throughout my back test I never occurred more than 4 losses in a row on any pair.
My back testing documentation was a little messy and I missed out some wins so added them to the end of the list. Basically the order of my wins / losses isn’t real, it’s just like that for simplicity of reading.
Then I don’t see any reason why it should not be sustainable for a career in Forex Trading
I live off Forex Trading and my yearly goal is 20% (before tax).
Hey @naruto98, since 2013.
I had only one other job in 2015, for one year. I moved to London and I found out that my trading activity was not enough for the cost of life in London, so I decided to have a side job for one year.
Don’t forget that when backtesting there will be times when your position in a winning trade means you want to keep it open and this prevents you taking an opposite or additional signal in the same market. If you’re already long EUR/USD from last Monday and then every day this week you get an additional buy opportunity, will you really really want 6 EUR/USD longs open simultaneously?
In addition, allow for how many trades your margin and risk tolerance allows you to hold open at the same time.
The holding period for these trades is very long, which makes both these issues highly likely to occur and to make your backtesting misleading.
