There is a word in trading that few people like using but to me its a must especially when you go from paper trading to live trading..That word is LUCK
Imagine you’ve spent 3month paper trading building your account up 5 fold ..and then looms the big day..the live day.
And just your luck .. The market moves in a range of just a few points all day and you lose .. And guess what ...it never happened once in the 3months you paper traded. Well that’s just bad luck and it does happen and it happens alot more than people admit. We need an element of luck when we 1st go live we need nice ranging days with clearly defined signals.
I think its a crying shame if a new trader does all the right things and then decides to go live in a week the market gives his system the worst draw down its ever seen. The big problem here is that I don’t think there is a thing we can do about it. Perhaps you could look forward and see what news announcements are coming out that week and try to steer clear of any weeks that are full of impending results and reports.
If Nato decided to invade Iran this coming week I don’t think Id be too inclined to start my trading career at that time.
Another way of perhaps increasing our odds of having a good start is to look and how many losing trades in a row our system has given over the past 6 months. Lets our system has had at worst 5 losing trades in a row, and it is currently on 1 .... I personally would rather wait until we were on 4 or 5 before I started live because the odds of a 6th and 7th must be more remote than a 2nd or 3rd which is the case if we started now.
Or on the flip side if our system has a record of 7 winning trades in a row over the past 6 months and we are on 6 I personally wouldn’t think the odds are stacked in my favour of getting a 7th.....but if im on 1 or 2 then I think Id be more happy.
This timing need only be done when going from paper to live to try and give you the best possible start.. Would I for example wish to start trading in August when there is a high chance many traders will be taking their holidays which will be probably reflected in the lack of volatility in the market.
lets don’t kid our selves here .... we need volume and we need traders ..without volatility we fail simple as that.
Its all about stacking the odds
Imagine you’ve spent 3month paper trading building your account up 5 fold ..and then looms the big day..the live day.
And just your luck .. The market moves in a range of just a few points all day and you lose .. And guess what ...it never happened once in the 3months you paper traded. Well that’s just bad luck and it does happen and it happens alot more than people admit. We need an element of luck when we 1st go live we need nice ranging days with clearly defined signals.
I think its a crying shame if a new trader does all the right things and then decides to go live in a week the market gives his system the worst draw down its ever seen. The big problem here is that I don’t think there is a thing we can do about it. Perhaps you could look forward and see what news announcements are coming out that week and try to steer clear of any weeks that are full of impending results and reports.
If Nato decided to invade Iran this coming week I don’t think Id be too inclined to start my trading career at that time.
Another way of perhaps increasing our odds of having a good start is to look and how many losing trades in a row our system has given over the past 6 months. Lets our system has had at worst 5 losing trades in a row, and it is currently on 1 .... I personally would rather wait until we were on 4 or 5 before I started live because the odds of a 6th and 7th must be more remote than a 2nd or 3rd which is the case if we started now.
Or on the flip side if our system has a record of 7 winning trades in a row over the past 6 months and we are on 6 I personally wouldn’t think the odds are stacked in my favour of getting a 7th.....but if im on 1 or 2 then I think Id be more happy.
This timing need only be done when going from paper to live to try and give you the best possible start.. Would I for example wish to start trading in August when there is a high chance many traders will be taking their holidays which will be probably reflected in the lack of volatility in the market.
lets don’t kid our selves here .... we need volume and we need traders ..without volatility we fail simple as that.
Its all about stacking the odds