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First off, April was definitely not a "normal" market. Volatility has been over the top crazy for 2 months. Daily ranges have been greatly increased. So if you could survive the volatility (read "stomach the stop loss sizes) then the potential for profits (and losses) were much enhanced.
Second, the transition from "sim" to "live" is a cruel affair. You think you are doing the same trade plan but the anxiety over losses tends to make you (consciously or not) more likely to be overly cautious getting in and too scared to stay the course if the trade seems to be going against you.
My advice (for what it's worth) don't expect the market to always be the way it has been for the past couple of months. And, double check your behavior when you are getting in and out. Are you demanding more "confirmation" than before? Are you bailing out sooner than before?
April was a very nice month for trading. Volatility was falling at a fairly smooth rate. The chart below shows beginning May 12 there is a good chance for a sideways range in the market or maybe a bounce in volatility. Usually once you see it coming, it actually already started. Doesn't mean you cant trade May...Just means you might need to change gears.
There is a lot of good stuff there just in the past few weeks, it shouldn't take a very long to catch up, and it's all about the current market so it's very relevant. I'd advise to start following it from where we are today
Any short time frame results can be considered an anomaly since market behaviour changes constantly. Its the longer term results that can provide a clearer picture of true results.
That being said, sim results can be very different than live trading results as well since there are so many additional factors that can come into play such as execution speed and fill price and psychological factors.
Only when you have traded live for at least 6 months can those results be considered reilable. But as always markets change results can change too.
Automate your strategy in all markets : Choppy, Uptrend,Downtrend using Market Replay to observe and adjust with a proper money management on it. Learn how to code it or search some coder to do it, here in this forum or some vendor.As said micro futures is a good option to have more margin with the drawdowns.I trade MYM instead of MES ...its moving similar and the losses are less with one contract. Then increase contracts if your account is growing or decrease if not.
You will have an idea testing in market replay exactly the same in Sim with the difference that you can test years/ months in 30 minutes and see his behavior.
Hope this helps. This was my solution.
Snowman:- I've recently started getting my stuff together and I found a volume/price action strategy that I was having great results with in sim trading the ES. I traded nearly every day in April and was making great trades in the mornings for 1-2 points with 2 (sometimes 3) contracts totaling almost 80% return on my sim with a 67% win rate. I was ecstatic that after 6 years, I finally had a strategy and put it use in a sim account that I stuck with, had a plan, executed it, and was getting rewarded for it. Yogi:- Congratulations on finding the strategy. However, let me ask you few questions - this will help you to introspect further.
Did you backtest that stratgy on historical data? If yes, for how many years of data or how many total trades tested?
This will show you that whether this strategy gives result consistenly or its just that specific time period or specific movement giving the positive result. I have seen in the past, that the streatgy is working superb in recent time period, but when we test that in the past, it's not eligible to trade as it doesn't give positive result.
So if you says that you have found system which worked too great in April, as per your SIM trading result, and its not working in May, then I suggest first you do backtesting on historical data - atleast 10 years data or about 5000 trades. This will cover various market cycles and you will see how the stratgy performed.
You may find that the strategy is superb which gives similar results like April month most of the time, and rarely it gives bad result, which are perfectly fine for long term.
If you backtest your stratgy you will get below metrics-
No. of Winning trades
No. of losing trades
Winning Rate (%)
Losing rate (%)
Average winner (points)
Average Loser (points)
Average Winner/Average Loser (Reward:Risk ratio)
Max No. of winners in a row
Max No. of losers in a row
These metrics data will help you to find if this strategy is profitable over long term.
Snowman:- So I continued trading sim until this week where I can't seem to catch a break. Every single day in sim, I was either breakeven or up to +200-$300 each day. Now that I moved to live, I can't seem to find the same trades I was having such great success with. I know it's only been two days of live trading and I'm going to keep at it but my first day was -$100 and today was basically breakeven minus commissions. Yogi:- The last parameter says that there could be x number of losing trades in row.
Ofcourse when you start trading, it doesnt have to be same as bactesting, but you can consider atleast twice the backtesting result. Example - If backtestin shows that there were 7 losers in a row, then should be ready to face 7*2=14 losing trades in row. Alternatively, you can look for Monte Carlo probabilities method to find possible number of losing trades in row.
Snowman:- Trades in April for me were plentiful but now recently in May, particularly since last Friday, I can't find the same type of trades as I did in April. For the more experienced traders, was April an odd month? Does my strategy only work in odd market conditions? Are off days/weeks just going to happen?
I plan to stick with it but its just disheartening after being diligent with live sim and market replay proving my strategy to come to starting off with bad days.
Yogi:- I would be very straight-forward to say that, you are not ready yet if you have tested strategy only on April month's data. One month's data testing using backtest or SIM trading is just not enough.
Based on my experience in market, I can say that System with positive Edge and Money Management are crucial for successful trading. And to find if system have edge ove time, you need to test it on large historical data set.
With current movement on charts, we could see some specific pattern and we consider it as strategy. And it also works on recent market. I have seen it multiple times. But it could be just temporary. It's also possible that system is really great and you may get similar results in 10 out of 12 months, but there could be 2 out of 12 months when system doesn't perform well.
You would not know what is your scenario without testing it on large historical data set.
Some days this week have been a lot of whipsaw or (Consoldation) no one can make money when this happens. I'm trying to do 20-25 ticks a day on a live account. Somedays are pretty good, I had a 40 tick trade this week, gave it all back the next day. Trying to work on my plan and be more disciplined. I have to build up my account again after yesterday, it took quite a hit yesterday (All my fault). KevinB
Emmanuel - I began journaling when I switched to a live account this week (only 4 days so far but it's something). I do write down my faults and my wins and why they happened. It actually helped today because I kept getting scared out of trades which I noted in my journal and today. I remembered that today when I turned a medium loss into a small winner. I've been considering starting a journal here to keep my accountable and get feedback.
In the beginning I used the SIM mainly to learn the platform and the different type of orders. It lasted for a very short time, maybe a month. Now the only time I will use the SIM is to test some new kind of trade setup. I am mainly an options trader and playing different scenarios with volatility setups before I commit my money, the SIM is indispensable, BUT only for this reason. Depending on the trading platform/broker combination, the SIM can help a lot in fine tuning your trade selection, your trade entries, and of course, your trade exits. Overall, expect to pay your dues, like all of us have, and your persistency and determination will get through this tough training period. Try using mini contracts and don't loose more than 2.5% of your account in any trade and eventually you will make it. Good luck my friend and welcome to our trading world. All the BEST........