Your definition of Consistently Profitable?

How long would you paper trade with a system before you decide to go live with it? 1 month? 3 months, 6 months? shorter or longer than that?
And what do you consider to be 'consistenty profitable'?

GG

I have always gone live straight away with a new system, but with much less money...

Consistently profitable is when you have a fine line from start to X numbers of trades...

Drawdowns bigger than 15-20% makes you no longer consistent if you ask me.. this off course depends on your acc. size

Personally I'd test things live, with small risk, I wouldn't worry about drawdown figures, if you're making millions of percent with 90% drawdown, you can just lower the risk, no problem there.

What you want to look at is what variance you're happy with, if you're not sure what figure you'd be happy with, you can come up with theoretical results you'd be happy with and calculate the variance of that.

i go straight live with the trend...

any system works ... people say all indicator are late yes its true but its never be "too late"... my target is 50 pips a day and 1000 pips a month but if i got 500 pips i considered that as consistent... most people dont use stop loss or they never obey their stop loss thus leading to draw back... but i stress here again all system all indicator any stop loss and take profit is work as long as u with the trend... my 2 cent

Every year you make more than you lose.

Even the best trader can have a bad month, it happens.

1 month is way too short.

I would say 1 year!

For me "consistent" is more related to obtaining a smooth equity curve going up.

It's about getting a low level of uncertainty about "how's gonna end up the month".

Consistent as opposite to roller-coaster.

This is a great question and theres no definative answer..

the question here is not about time, # of trades maybe abetter indication

Personally what I have always done is demo until I feel very confident to go live. It's about confidence that only you can be judge of

If this means you get a rude awakening once live then this is just part of the learning process. your respect for the market will increase and next time you won't be (as) naiieve (hopefully)

Its your business - its up to you.. Just like if you were practicing a sport, how long before you start competition? Most likely when you feel confident enough to compete... but its down to you not necesarily time

I have seen quite a few real trade histories by people on this forum.
They have had some phenomenal returns over a few months, only to lose most of their profit later.

It is hard to quantify without knowing how many trades someone has taken. Your methods, system, or money management have to survive the times when markets are favorable to you and when they are not.

I think you need to see more than 6 months (nearer a year) of results from someone who takes trades almost every day. That is long enough time to see their "demons" or psychological issues, if they have any, come to light. This is also enough time to see various market cycles (hopefully).

I guess my point is this.. If you have a system that is (let's say) making you 30 to 50 pips per day and is based on price action S/R , trend lines etc. If it works for you over a couple of months, is there any reason why that should suddenly stop working?

I have tried dozens and dozens of indicator based systems, and they all only work in trending markets, but I have just discovered that keeping it simple and working from 1Hr plus timeframes seems to be the answer (for me) So Should I live trial it after only 6 weeks?

GG

Pips is just a fraction of the story IMO.
A person can win pips but if his position size is very small it will not do much to bolster up his equity.
For me the criteria of a good trader would be:

1) Equity growth of at least 20% per year for 3 CONSECUTIVE years
2) Risking not more than 3% each time per trade and not more than 10% for all opened trades.

Just my views....................

I think Gg33 wants to know if he should go live.
Sure, small account (micro), but still enough money that you will
care about the results.

This, of course, could create an endless debate about how long to demo vs. live. I think you will learn your own personal pitfalls faster with "Real" money.

Basically, even with a sound trading strategy, [trading with trend, using support and resistance, proper money management]...
people still mostly fail (myself included)

because they can't stay disciplined and follow their own rules.

thats the key, try a system say 3 month, if you're still trading exact this system after 2-3 month and beein profitable, you should try with some small money


...most people change system every day like clothes....

Basically, if you are starting out day one as a trader, the goal is to stay away from live market action as long as possible so that you can learn as many lessons as possible w/o paying for them. I didn't start trading live until I was able to double a $1500 demo account twice. If you can double a demo account twice, you can then start thinking about going live. Even though I doubled my demo account twice countertrend trading, I still didn't have a clue as to how to trade profitably.There is a dark side to countertrend trading and unfortunately, I didn't find out until I went live(funny how that happens ). In the first year or so of trading FX most don't have a clue what they need to know to keep them out of trouble.

As a short term trader I monitor myself on a weekly basis, although I know that I'm only really looking at the varience in returns. Realistically I'm looking for consistency on an annual basis.

As for how many trades before trading a system, Id argue a minimum of 1000, and thats probably not enough.

Maybe go live with a small amount. The problem with S/R is that you don't know why a particular level is relevant and have to make assumptions based on historical data. Should some market conditions change, you could be met with a large string of losses.
S/R with p/a is a very popular strategy here yet most still fail. Since your entires are essentially random* your edge lies in your MM. Maybe MM itself is enough but i would wait an extra long time testing it out through all market conditions. As was mentioned, many trading systems here produce large profits for a while, which i attribute to tricky MM, but ultimately the law of large numbers + negative expectancy do their thang.

All just my option, mind you. I'm not consistently profitable

*entires are based on the most widely available information and have no apparent edge.

i agree with troikaone. stay as long as possible and make all your mistakes on demo. there really shouldn't be any hurry. i demoed for over a year before i went live then struggled for another year on live before i started seeing some limited success. really worked hard on trading psych. i am not yet consistently profitable, however you define that, but getting close.

making a profit every month would qualify as being consistent profitable to me - even a few losing months each yr still qualifies if consistently profitable for a number of years.

You have to expect a losing week or two and this is why risk has to be managed so that you survive the bad times and are still there for the good times.

After demo trading a hundred trades and you are confident to go live then go live. Without confidence in YOUR system it is impossible to stick to it's rules after running into a losing period which could last weeks.

sabtrader

Each trader has his/her own way of qualifying a trading system. Personally I use micro lots to test a new system, I rarely demo anymore. But if your account is small then demoing first is recommended. The moment that I became consistently profitable was the moment that I incorporated these steps into my trading:

1. I started using a stop loss for each and every trade.
2. I started using realistic money management.
3. I started writing a journal of each any every trade noting best practices and what I learned from each loss and gain.
4. I started trading an intraday system and a longer term system.
5. I started tracking weekly and monthly and quarterly profit factor for each system.

Profit factor is a great and easy way to quantify your system and see how it performs each week and month. I have learned that not every system works all the time, due to changing market environments and such. By incorporating
multiple types of systems I have more probability of profiting during differing environments and so, over time, I remain more consistently in the green. Profit factor is figured by taking your profit gained and divide it by your losses. So a PF of 1 is essentially your losses equal your gains. Shooting for a PF of at least 2 is quite good and will, over time, help you reach your profit goals.

Oh, another thing that has helped me along my forex profit path: I set easily obtainable profit milestones, and when I reach them I reward myself in big
ways! The PF and the milestones really helped me with my confidence, which can be a huge obstacle in any trader's career.

Good luck, you can do it!

P

Ps, there will be weird and problematic months in trading. All we can do is continue to learn and roll with the market punches while slowly and steadily growing our accounts. Make it like any other business, treat it as such.

You should demo as long as possible and while in the demo set up a predefined stop that will label that trade a failure. If it's 40 pips, 50 pips or whatever. If it turns around at 41 pips, it should still be labeled as a failure. The next step is to figure out why it failed. Now, if you are doubling down and adding to losing positions, until it finally "turns" in your favor, then you are totally missing the point of a demo. If it goes beyond your stop, the play failed.......period. Try to learn from your mistakes....because you will continually be in learning mode for a very, very long time. You can't possibly grasp all there is to know in a year about a market that has been in existence for decades and decades. You are just scratching the surface folks.

Basically, you are going to lose on a fairly regular basis whether you are in a demo or live. However, my greatest discoveries about the FX market occurred after taking substantial losses to my live account. It's almost as if my brain went into extreme survival mode enabling me to come up with some incredible theories about price action. I don't think I would have reacted the same in a demo account. Every "new" trader who switches from demo to live thinks they are ready, but 9 times out of 10 they are not IMHO.