I spent a year trading about 6 years ago and was unsuccessful (lost some money, not too much). Then I stopped. Now I’m getting back at it and I have a scalping strategy. I just started using it, trying to be super disciplined to only enter when I know all the elements of the plan are in place. 8 trades in and I have 6 successful and 2 unsuccessful. 1 of the unsuccessful was pretty much a trivial mistake where I did not fully follow my own plan due to a dumb oversight.
@Dino1 I think you could get a pretty good idea of that if you backtest your strategy on one or a few currency pairs. Since you scalp with your strategy you shouldn’t need to go too far back in time to get an idea. A generally acceptable total number to get a reliable percentage is 100 trades. Divide the number of successful trades by the total trades taken over the duration of your backtest and you’ll have a percentage to work with into the future. As long as you follow the strategy to the letter the percentage result should be a reliable one.
Hope that helps
Scalping strategies are the most consistent ones, so in most of the cases it would work fine even in 6 years. As it was mentioned above, you can backtest it using historical data for several previous years to check whether the idea is still working. You can get the most reliable results using special backtestings software that would perform several hundreds of trades using your rules (due to the nature of scalping stratiegies, it would be quite easy to write them down as an algo). The results of the backtesting would be an answer to your question.
from all trading strategies scalping contains huge risk , only long term and lowest trading spreads can bring profit by scalping that brings profit in a short time.
I’ve tried on more than one occasion around these parts to get this point across but for some reason or the other it’s ignored (probably because it’s not something that anybody really wants to hear):
It may interest you to know that even a trading system (or trading plan as it’s being called here) that is 80% successful can lose money. How about that one???
Don’t believe me: take a read of the excerpt that I’ve taken from Larry Connors’ book “Long-Term Secrets To Short-Term Trading” posted below. Mathematically proven (and it applies to FOREX as well just in case you’re wondering).
Real success is all about position size, risk, and knowing your trading system (it goes without saying that discipline, which unfortunately I lack from time to time, is a prerequisite).
A solid trade plan is sure to bring in some good returns for every trader. As per the information you have given, you are doing pretty well by following your trading plan. Following a trading plan also helps one to stay disciplined and avoid emotions. So just formulate a trading plan and abide by it and your chances of losing will surely be less.
What you must remember is that there will be times when sticking to your plan will not let you close a good deal due to sudden change in circumstances. Hence allowing some flexibility in your trading plan can be the need of the hour sometimes.
You can make money trading whatever style you want
But, in order to make money, you’ll need to have a deep understanding of:
Your position size (using a stop loss in order to decide how many lots to trade)
Your management (how and when you shall trail your stop or take profit)
Your trading plan (be able to answer (with data) any question you may come up with - why do you take this set-up? What’s the strike rate? What’s the expected return? etc)
Make sure you backtest your strategy over SEVERAL YEARS
Why several years? The market changes, there are corrective years and impulsive years, so many sure you backtest both (as well as 2007-2008 etc)
