I do appreciate the input. I spend a lot of time in front of the screen but I realize many times that things are not as they seem at face value, and no matter how confident you are, mathematics and probabilities always work there way into the equation. I personally do not find any value in trading with a simulator or paper trading account. I did that for a long time at first, and it did get me very comfortable using the software, but I found that paper profits gave me false confidence and did not translate to real profits. Did you find paper trading helpful?
all traders suffer from not understanding where they are in the market. they don't know if this is a top or bottom or if it's consolidating to continue the direction it was going. also acceleration, slope, magnitude all come to play and this is where standard deviations help out. at 50/50 you need to have a profit factor about 1.75 at least.
I found a much better use for statistics once I had something to actually work with. In fact, it took me much less time to get proficient at statistics and probability than it did to get proficient at trading. And yes, simulators and paper trading are probably the most valuable training tools a trader can obtain. If you are unable to reproduce the results in live trading despite following the same plan then you probably need to work on your psychology, not your method.
bullshit also comes into play a lot in trading remember because obviously its useful if you make 1% a year for no one to be able to understand it or even specify what you are aiming to do . whereas at google its very hard for the head of search to not know anything about computers and get away with it for long that is not the case in this business. like its quite possible to have long discussions on whether its actually good or bad to not beat the s and p if you aren't even really trying and whether a hedge fund means u offset winning trades with losing trades or are tail hedge. bizarre imo seems unlikely to last
I Its discretionary. I look for setups that have a high prob of success, and I only take entries where I see potential for a 1:2 risk reward. I do have some guide lines and setups that I consider attractive.
Perhaps I am missing something, but where are the fees? 100 times ### equals ? The problem I see, is reward has to increase to 3 instead of 2, because there are many??? trades where you get out early and never reached two. What do you do if market stalls, or how much time do you give a trade when it not moving your direction? The 50/50 percentage is based on market going your direction initially but not to your target and depending on the Index you are trading can make a difference as well, the ES trades differently than Nasdaq. Someone commented on understanding where you placed trade in the swing or range of the day, have you spent time on studying swings and can understand basic Elliott of so many trend waves and counter-trend waves, so to know when to expect possible reversals are due, also "mean" time it takes to complete a swing/wave. Have you studied extreme formations, ends of movements and these often will reduce rewards. I have found back testing probabilities should not be addressed if the entry is correct, but area of managing the trade works best for me, can only control risk. Sample size 100 way way too small and have to check different amounts of volatility. Good luck.
Sounds like you want to know if you really have an edge. I had the same problem and I solved it by determining how often my strategy beat random entry. I disagree that a sample size of 100 is always to small. To test that, run a simulation of 5000 back tests where you enter randomly over the same data set but use the same exit criteria. How often does your strategy beat random entry? If you beat random entry 95% or more of the time, your sample size is big enough and you likely have an edge. Here is how I approached the problem. https://www.elitetrader.com/et/threads/strategy-validation.325217/
Great info in that link. Question; how exactly do you go about backtesting? What software do you use? Where do you acquire your data? Do you need to be familiar with coding in order to backtest? Sorry for the elementary questions. Thanks for taking the time to respond.
I wrote my own software. What exactly are you trading and what time frames? Also, over what date range did you 100 trades occur.