HEY EVERYONE
I have started learning forex from scratch since mid jan this year. Finally I have a stradegy in place, Since the first monday of march, i have entered 23 trades on my demo account and lost 6 trades out of them. HERE IS MY FULL RECORD FOR THE MONTH:
[B]WIN[/B] = 9
[B]BREAK EVEN [/B]= 8
:mad:[B] LOSS [/B]= 6
AVERAGE RISK TO REWARD RATIO = 4-1
Fellow baby pipers what are your opinions ?
If it’s 4:1 reward/risk, thats good. If it’s 4:1 risk/reward, that’s bad.
Couldn’t possibly tell, how much profit per trade, money management, etc etc, from the number of trades, it’s looks to me that your on the right path.
HI Hammyuk,
My teacher used to always tell me: before I can start trading my strategy with real money I should make 10 profitable trades in a row. What he have meant is that you should not confuse the demo account with a real account, because when you trade the demo account you do not have as much fear or greed attributed to your trading decisions. Assuming that reward vs. risk is 4-1, it looks like your winning probability is about 85% which is pretty good.
I’ve been trading full time for over 7 years, I have NEVER experienced 10 consecutive profitable trades !. IIRC I think the most was 8.
Thank god I didnt have the misfortune to run into your teacher :eek:
The probablility of consecutive wining and losing trades is a function of your systems strike rate. Achieving 10 consecutive winners using a garbage EA such as FAP Turbo or Megadroid is a walk in the park, and it means very little indeed.
Other perfectly acceptable systems may never achieve 10 consecutive winning trades even if you traded them day in day out for the next million years !
It’s probably sensible to set some performance metric before you risk substantial money, but I wouldnt suggest consecutive winners.
Simba you hit the nail on the head with this one, good observation.
Now to the OP, what did you learn from your break evens and losses.
The Ever In A Quandary VIPER
In 1997 I forgot which month exactly, I was a new trader at a brokerage firm, and I had made 32 profitable trades in a row. As far as what I can remember, I did not have a plan or too much experience in what I was doing, all I was doing was buying stocks in big publicly traded companies and when they went up I sold them. At that time obviously it was a strong uptrend in the market like it is today.
The reason I have told HammyUK to make 10 profitable trades in a row before he starts using the real money, is because when you are not using the real money it is so much easier to make 10 profitable trades in a row. Of course when you are using the real money you have emotions like fear and greed and doubting your trading plan, so it is very hard to make 10 profitable trades in a row.
How I have done 32 profitable trades in a row in 1997 is by being extremely lucky and being at the right place at the right time (and the teacher who told me to do 10 profitable trades in a row has been a professional trader now for 40 plus years).