I have been paper day trading since July 2023 and have accumulated some interesting statistics. Since this is sim, don't treat it too seriously, more for entertainment and for fun. Here are some facts: First ~80 trading days the paper trades were done with the Schwab SSE platform. Then I switched over to live trades for 3 months. Switched back to sim in early 2024, first trying out the TOS platform, then continued till today. I don't day trade every day and # days is not the same as total days the market opened. I already showed the average % profit graph in a different thread and here it is for completeness: Here is the same data plotted as cum % profits: Next is the graph for daily win %. I didn't collect win rate for the first 30 days and data is unavailable but similar, ~50% win rates. And finally, the TOS platform's cum profit % for scalping. First 80 day's sim cannot be duplicated because Schwab shutdown SSE in early 2024 and is no longer available so the only reliable data is the TOS results. The main difference between the first 80 days and the rest, in terms of method is first 80 days I traded BO the rest I scalped. I posted these as a tribute to @SteveH's posts, reposted by @Sekiyo on my other thread for the data confirmed his teachings: high win rate may make me feel good but produces inferior results compared to low win rate and higher R:R.
I seem to be the 1st, & perhaps the last to comment, but above graphs are pure fantasy. It has no relationship to how trading goes in the real world. Whether your simulated trading actually generated above is meaningless, as it is still pure data fitting. If not by you directly, or by you indirectly -- e.g., was that your only set of simulated trades? Or, even if your simulated results are like above, there were undoubtedly hundreds, or thousands, or other traders whom also made simulated trades, but were net losers. Obviously they did not bother to post their graphs, so basically your one set of graphs is the result of thousands of other graphs. Thus from a macro view, just one set of decent graphs among thousands & thus the result of chance, or data-fitting.
the key to trading is not understanding patterns and R:R but understanding probability. high R:R is low probability. Novices see only R:R and that is the main reason for them losing if you get high R:R with high probability then you are taking advantage of another criterion which is time. the only way you will get high R:R with high probability is, if you are long term investor, in a long term bull market. i trade high probability for one point. The key here is that you understand high probability and do not scalp low probability swing set ups. the difference novices do not know and that is the only difference between profit and loss it took me 20 years with Brooks to finally understand probability. but i am sure others will 'get it' much earlier
i trade high probability for one point. The key here is that you understand high probability and do not scalp low probability swing set ups. then you will get the high win rate that is critical to profitable scalping
Thank you for your response. @Q.E.D. I actually agree with you and that is why I said in my opening remark the post is for entertainment and for fun read. The other purpose of the post is to support @SteveH's posts on the relation of profitability vs win rate + R:R. I found it quite profound and revealing. But I do want to open the discussion on curve fit and overfit. It is real time forward testing using TOS' Papertrade platform and since I don't use any indicators, there are no parameters to fit? The only parameters are SL and R:R. The other issues I am agreeing with you is I am not convinced it has any real edge. It is very likely random. 2500 datapoint is not sufficient to eliminate the null hypothesis assumption. The realism of any paper trading platform depends on a number of built in artificial factors and I have no idea how realistic TOS is. As an example, order queuing, I noticed when I placed an order right after market opened, it never got filled instantly. Yesterday, it took 30 sec and by then, the initial trend was over and I ended up been stopped out for a loss. The other difference is, on paper, a market order is always buy on ask and sell on bid. For a 10 ticks profit exit, I netted < 8. Take care.
any body in a discretionary method can have a bad day. but i have been trading high probability only for a short time and i am learning the finer points
Short time = 2 day ? Dude … Stop fooling yourself. You’re trading high probability for +1 day and you’re already in drawdown. I lf you had taken 1 trade per day, flip a coin, with a 3:1 RR then you’d probably be ahead.
it is not coaching but just asking you to think about the one thing, that only Brooks, stresses more than any body else. and such abstract concepts are not easy to grasp so best of luck.