IMNHO, I strongly you suggest wait until you have at least 50k in cash, or at least a year's worth of expenses saved(rent/mortgage, food, insurance, other necessities). Another factor you need to include is trading fees, software fees and other fees including trading. I did exactly what you did, and boy do I regret it. The reason I regret it because my savings couldn't cover me for the "required" time to learn and be profitable. God's Blessings!
Can i ask you a couple questions? What do you consider to be a "serious trading edge"? Are you referring to a certain % win rate? Or could a system that had a 55% win rate but whose winners were much larger than the losers be considered in YOUR interpretation of an edge? The second is a basic example of where a very small edge can be found and made into a very profitable trading style by ones psychology and MM to exploit that edge. And second, Can you explain a little more why you believe a trader could Demo/Backtest a system/method for almost a year and have good results, but that data would be no more than just LUCK? I just want to make it clear that these questions are in no way shots at you. I am simply looking to understand your point of view more clearly.
Quote from craig: What do you consider to be a "serious trading edge"? Positive expectancy - you have a profit factor that, after all trading costs are factored in, is reasonably above 1.0. If it doesn't make money, it is not an edge. Are you referring to a certain % win rate? Or could a system that had a 55% win rate but whose winners were much larger than the losers be considered in YOUR interpretation of an edge? Win% is irrelevant. That is a stat that new traders focus on and experienced traders generally ignore. Positive expectancy/Profit factor is a measure of edge. And there are further metrics that define the quality of that edge, such as Sharpe/Sortino, Drawdowns, and many others. Can you explain a little more why you believe a trader could Demo/Backtest a system/method for almost a year and have good results, but that data would be no more than just LUCK? A backtest is useless. Showing that something worked in the past is usually just cherry picking or curve fitting or coincidence, etc.. A backtest that is then walkforward testing for a large number of trades and/or over a number of different market situations MAY be an edge. But if you have 1,000 traders/methods, then 100 will be in the top 10% of performers just by PURE PROBABILITY. But newer traders rarely know the difference. I have watched (such as on the sites I mentioned for auditing) 1,000s of systems that people were convinced worked. I would say out of a 1,000 that MAYBE a couple are interesting. That is why I said an edge is not an easy thing. Most newer traders think they have edge after edge, and then find out after trading real money or a blowout or after significant time, that they were badly mistaken.
i agree with you 100%! We must have had the same fellow teach us trading and system development. The vast majority of traders want something that works like clockwork, when in reality the markets don't work like clock work. The best system is the easiest to apply and adapt to! those are the ones that make you successful.Most good systems only work 30-40% of the time. The trick is to win much larger than you lose.
In saying that, you are implying that you have never had a losing trade, which would make the markets predictable which in turn would make all who know how to follow trends 100% winners!! Am i reading this right from you?
You are implying that a "clockwork" system equates to every trade succeeding. A "clockwork" system could also be defined as something that profits regularly with low drawdowns.
Why don't you take an absolute extreme and apply it to make yourself feel better? Oh wait, you already did that No, champ, I'm not saying that 100% of trades work out. There are ALWAYS unknown forces that can come into play but.....a very high % of wins and very low draw downs is a reality for some, day in and day out.