Which would you do in this trading situation

Discussion in 'Trading' started by Robertwiz, Jan 16, 2012.

  1. Hello,

    Let us suppose you have researched and developed a trading system and based on backtesting, you have discovered the following results:

    1. You could gain a decent return, but with less valid signals and a worse risk reward ratio using an instrument you could afford to trade now.

    2. You could gain a much better return with a better risk reward ratio using some intruments that would give one a better rate of return, a better risk reward ratio and such. However, to use these instruments would require one to save for 1 or even two years.

    Would you A:

    1. Trade the system on the worse instruments so that you at least get your feet wet now, have some experience, learn more about trading and gain some more capital.


    2. Wait one to two years till you have the capital to trade the better instruments. The advantage is that if the system continues to work, by then you will have a better trading experience, more capital and a better return on equity. The disadvantage is that until one or two years from now, you will never get to experience trading live and will always wonder until then how the system works in real time.

    I would appreciate any thoughts on this quandary.

  2. Whatever your risk tolerance is. If you feel like you can tolerate a semi profitable system now and have to wait longer to use your more profitable one, that's what I would do. You would gain experience and screen time.
  3. lindq


    The answer is not to base your decisions, your capital, and your future, on backtesting alone. This is especially true if you are new to the business. Because without considerable trading experience you really don't yet know what you don't know.
  4. I would beg, borrow and steal if I knew I had something that worked...

    ...but I really would need to know that I had something that worked and that is another story.


    P.S PM your system and I can tell you if it works...☺
  5. Demo trade it now and save your money for a year.

    Hopefully the market conditions haven't changed and it still works well in a year.
  6. ammo


    could u use it trading 1 lots and make a small amount now, that might help you save faster and gain experience in the mean time..and you can probably tweak it get rid of a few bugs
  7. Trade it as small as the system allows but trade it and get the screen time in with real money up. Set daily and weekly loss limits. Understand that retreat is as valid a tactic as charge when you need to back off. Find out what you have and find out who you are.

    When you wait to live ... you die.