I don't think you are quite correct. The true principle of trend following is you buy when it is going up and sell when it goes down. If you use indicators, perhaps you are correct, you use them to predict if what goes up will continue. I am interested in 1 tick because you cannot follow closer than 1 tick. The trick is if you don't have anything else to hang your hat on, you really only have a 50/50 chance the next tick after you enter will be up and the net result, after slippages, is you lose. I relied on gut feel to pick the tick to follow, since win rate is only slightly greater than 50%, I am afraid my gut feel is also mostly random.
Hello ironchef, lol fair enough. Question: 1. How many years, months, weeks, days does the edge need in back test to prove to you $1million was made?
If I do daily compounding, from an initial capital of $1000, about 5 years if I live trade and the edge is real.
And Mr @SimpleMeLike, that is every trader's dilemma: If you are young, a twenty or thirty something, you say I can't wait 5 years. If you are old, one of the over the hill gang, you say I don't have 5 years.
There are quite a few of you folks trading with +1 tick. I tried it today, it is more scalping than trend following?
Long(er) term MONETARY "goal" has NOTHING, NOTHING to do with back testing or otherwise developing an "edge", trading plan, system, method, or the likes. $4,167 x 20 trading days a month x 12 months = $1,000,000+ annually. Does your choice of instrument, capital, and available time allow it to occur? +1 tick x 100 ES contracts = $1250 gross. Are you prepared with a proper mindset and discipline to repeat that trade 4x a day? Meanwhile, you are more concerned with whether you trend trade or scalp. No wonder you can't get out of the starting blocks. Age is not a factor for neither trading success or trading failure.