When to start trading real money

Discussion in 'Strategy Building' started by bitstream_ryder, Dec 9, 2018.

  1. jl1575


    Well, I saw many cases at ET that people doubled or tripled their money within a short period of time, a couple weeks to a couple months, only to gave all of profits back and more. However, I would consider it a real or reliable edge or talent in the case of Optionsinvestor who turned $2000 into more $200,000, a 100X or 10000% return in about 8 or 9 months.
    #11     Dec 9, 2018
  2. jonahern


    after solving the prob in other thread
    #12     Dec 9, 2018
  3. smallfil


    Optionsinvestor is the real deal. Trolls and BS artists ruined his thread. Doesn't really matter because the good traders will continue to trade the stockmarket and make monies while, the trolls and BS artists continue to harass people on Elitetrader. Those who attacked him are either just plain trolls who do not even trade the stockmarket or losers who cannot figure out how to trade! It is just plain envy and jealousy of the losers! And losers have unlimited excuses!
    #13     Dec 9, 2018
    vanzandt and jl1575 like this.
  4. smallfil


    You have to have an edge. If your trading records over hundreds or thousands of trades show you have an edge, you will win so, can begin trading live. However, if it shows a negative expectancy, you will only lose your monies. Your gains have to be multiples of your losses and the winning percentage does not matter. Even if you only win 40% of the time and lose 60% of the time, you can make monies if you have an edge.
    #14     Dec 9, 2018
  5. fan27


    Honestly, you should spend time figuring out how to backtest this system. It will save you time and money in the long run because sim trading on a small window of data really does not tell you much in terms of the viability of the system.
    #15     Dec 9, 2018
    ironchef likes this.
  6. REDP1800


    no amount of backtesting a strategy in this day and age does any good. You have no idea of the scaleability without actually being in the market. It isn't just volumes and limit order books. the algos see you and will attack.. just be mindful. Start very small
    #16     Dec 9, 2018
  7. wrbtrader


    Many many years if you remain with that rate of 0 - 2 times per day especially via the fact you used the number of 0 to imply you don't get trade signals on some trading days.

    Many years should cover many different types of market conditions that typically impacts the trade results of most traders.

    Out of curiosity, you've been trading live with real money for 3 months, did your trade method actually gave no trade signal on how many trading days in those 3 months or were the days of no trade signals associated with the fact that you just were not trading on those particular trading days ???

    #17     Dec 9, 2018
  8. fan27


    Simply not true. A backtest can tell you if a strategy is a loser (most are) and depending on the timeframe, can give you an idea on whether it might be a winner going forward.
    #18     Dec 9, 2018
    qlai likes this.
  9. gaussian


    Purely subjective.

    When do you feel comfortable throwing all of your cash at it? You are going to get a lot of different answers. I will throw mine in as well:

    1. What is your maximum exposure?
    2. What is your risk-adjusted metric? (Sharpe, Calmar, etc)
    3. What risk-adjusted metric number makes you feel comfortable? (Ex. Sharpe > 0.8)
    4. What is your maximum drawdown, and why? Where do you lose the most?
    5. Can you explain mathematically why you win when you win?
    6. Have you walk-forward tested your system? How does your system do when trained for N days and traded for N+X days?
    7. What is your risk of ruin?
    8. Based on (7) what is your ideal capitalization?
    9. Have you looked into the kelly criterion and determined your maximum leverage?

    These are just a few things I use to evaluate a system. There are many more - for example 50 trades is a statistically significant sample for an approximately normally distributed variable (i.e. log returns) but wouldn't make me feel comfortable in terms of total performance. Fat tails make me more cautious which is why I look to ruin analysis.

    I will unfortunately break the news to you that I think everyone else is ignoring. If you cannot program a strategy you are doomed to failure. You are removing the ability to walk-forward and monte-carlo test your system. You are removing all ability to do any sort of real analysis on your system performance over time. Since you cannot program the system pay someone who can. It could be as simple as an excel sheet or an R script. Pay them out of your investment capital. This investment will save you many, many thousands in the long run.

    Hope this helps. There is no easy answer. You are going to get a lot of garbage responses. Especially in a forex forum. If you cannot mathematically explain your edge you have no edge. End of story.

    EDIT: Sidenote: You can tell a post is worth ignoring based on the amount bold in it.
    Last edited: Dec 9, 2018
    #19     Dec 9, 2018
    daffyff, TomasOne1, qlai and 2 others like this.
  10. 3 Months demo profitably is ok....start with mini lot sizes and go live if you are confident.
    #20     Dec 10, 2018