Using a $1000 stop, the max drawdown is just that. Unless we get real unlucky right off the bat, 5-10K should do.
Trading SPY should yield the same result with 1/5th of the size. $200 stop is about 4% of your account.
I don't know whether i get it right but a max drawdown = to a single trade stop seem quite unlikely to me.
Right, I meant one would need 5-10K to trade this without blowing out. One might not feel comfortable with much exposure to the market, or percentage risk. I just want to know if this will work or not. I know personally that it is working now. I've been doing it for several months. Even if successful this will not make you rich overnight. I need a long term strategy. That's what this is about. Can someone trade mechanically long term successfully? This not just for fun, I intend to make a living at it, if possible.
GMS..... your post on 4-09-03 should be read and re-read by all mechanical system traders repeatedly. It is the reason why i do not and/or cannot trade mechanical systems.
If you are serious about this, you should post time of trade . If you are really trading just with MA save yourself a time and add some directional filter before you run out of money. Walter
4/9/2003 Long 883.50 @ 8:00 Stop & Reverse 876.25 @ 9:30 Short position still open P&L -362.50 [/B][/QUOTE] Commis = -5.60 Slippage = 0 Net = -368.10 YTD = -368.10
lost connectivity Can this not be solved via technology? passing the wrong trading parameters What do you mean by this? bad feed Does this happen often? temp computer problems Again, can't technology be used to reduce this? news/rumors Could this not move the market in our favor just as easily? not getting filled at the price the system thinks it got filled at This is why we calculate in slippage. Do you knew a reason why this calculation is not sufficient? tweaking your system (changes everything) The point of mechanical trading is not to have to tweak. Am I wrong? Your nerves and quality of life The second reason I want to trade mechanical. Shouldn't this reduce stress? Do any of you feel that mechanical trading was more stressful? My intention is not to criticize but to understand this once and for all. Thank you for your time.
What percentage of your trading stake is $362.50. Assuming that your risk is 1% of your account then we must conclude that the trading account needed to trade this mechanical ES system is at least $36,250. Percent risk (money management) should also be a part of your trading system.