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Your definition of Consistently Profitable?

  • #21
  • Aug 15, 2010 9:38am Aug 15, 2010 9:38am
Quoting piptrain
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:
I think that is a fantastic strategy/approach to learning FX. Keep up the good work!!
  • #22
  • Aug 15, 2010 9:46am Aug 15, 2010 9:46am
It is interesting that very few posters provide their definition of being consistently profitable.

How many weeks can one be lucky and end the week profitable? 8? 10? 20? 50?

Where the luck factor stops and the edge that system provide comes in?

I would declare my self consistently profitable if I make profit in 25 out of 30 weeks. And only if my average weekly losses are smaller than my average weekly profits.

That is because I believe that one can't be lucky 25 out of 30.

I mean, if one is realy so lucky, he has no need to work at all. He can walk in the casino where he will enjoy, and get out with fat profits with such a luck.

Or I am wrong?
  • #23
  • Aug 15, 2010 9:50am Aug 15, 2010 9:50am
Quoting zoreli
It is interesting that very few posters provide their definition of being consistently profitable.

How many weeks can one be lucky and end the week profitable? 8? 10? 20? 50?

Where the luck factor stops and the edge that system provide comes in?

Or I am wrong?
What about if you knew why you were profitable or not? ... maybe this would help

If you dont know - any win or loss is just luck
Time hides Nothing
  • #24
  • Aug 15, 2010 9:57am Aug 15, 2010 9:57am
Quoting CindyXXXX
What about if you knew why you were profitable or not? ... maybe this would help

If you dont know - any win or loss is just luck
Good point CindyXXXX.

I was profitable when I followed my rules. However, sh*t happens. Market conditions change from time to time. Anyone can & will have winning and loosing steaks.

Question is, after how many weeks in profit can one declare himself consistently profitable.
  • #25
  • Aug 15, 2010 10:03am Aug 15, 2010 10:03am
Quoting zoreli
Good point CindyXXXX.

I was profitable when I followed my rules. However, sh*t happens. Market conditions change from time to time. Anyone can & will have winning and loosing steaks.

Question is, after how many weeks in profit can one declare himself consistently profitable.
Well if your system generated 1 trade a month then a few weeks wont really cut it will it.

A certain number of trades would be good like a 100 at least... Someone else mentioned 1000

But in my honest opinion only you can be the judge of when the time is "right", like everything else with trading theres no definitive answer

If you're wrong then you will soon find out - you will learn, and the process will start again... Making you all the wiser each time

Its a tricky question but if you are simply trading by a "green light" system so to speak then what reasons do you have for entering apart for the formation of some pixles on your monitor. How can this not be gambling?

Understanding what you are doing and why is key IMHO
Time hides Nothing
  • #26
  • Aug 15, 2010 10:33am Aug 15, 2010 10:33am
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
Quoting zoreli
Good point CindyXXXX.

I was profitable when I followed my rules. However, sh*t happens. Market conditions change from time to time. Anyone can & will have winning and loosing steaks.

Question is, after how many weeks in profit can one declare himself consistently profitable.
Why are your rules profitable? If they're profitable because you've curve fit some parameters to the last 10 years of data then i would forward test for a year. If your rules are profitable because you've uncovered an inefficiency in the market then i would be dumping real money into it after a month or less.

It really depends why you think you're winning, in my opinion.
  • #27
  • Aug 15, 2010 12:04pm Aug 15, 2010 12:04pm
Quoting zoreli
It is interesting that very few posters provide their definition of being consistently profitable.
Percent profitability doesn't really mean anything when evaluating a new trading system in a demo account. You can be right 99 out of 100 times and still be an overall loser. My definition, as I mentioned in a previous post..., of profitability, is being able to double a relatively small account (say $1500) 2 times in a demo account. Otherwise, do not go live. This of course assumes you are trading your account using the same risk parameters as a live account....otherwise, it's useless. The original poster was questioning at what level of profitability should be obtained before going "live".

Once you go live, your goal should be to make a minimum of $60,000/yr. You have to be a fairly consistent trader to take away that amount of cash out of the market. Personally, I try to be right at least 80% of the time, it helps with your overall morale.
  • #28
  • Aug 15, 2010 3:43pm Aug 15, 2010 3:43pm
Quoting Troikaone1
Percent profitability doesn't really mean anything when evaluating a new trading system in a demo account. You can be right 99 out of 100 times and still be an overall loser. My definition, as I mentioned in a previous post..., of profitability, is being able to double a relatively small account (say $1500) 2 times in a demo account. Otherwise, do not go live. This of course assumes you are trading your account using the same risk parameters as a live account....otherwise, it's useless. The original poster was questioning at what level of profitability...
Agreed. This is more a reply to get an idea of where I need to go next before live trading, rather than recommendations for other people:

I'm fairly certain skill is number one. If you can tolerate using your trading method over weeks and months enough to make consistent profit that avoids exceptional losses, then you're ready.
The account multiplier goal you used points to the skills buffer one likely needs before watching live-trading psychology and/or forward trading reduce what one earns to a normal amount. It's nice to hear my hunch about this was right. (Not double, just the idea.)
"Using the same risk parameters as a live account" is one of the last steps before trading live, I'd venture. Lots of demo/simulator accounts doubled or more happen to iron through a trading method's rough spots in chart reading and other places.
  • #29
  • Aug 15, 2010 4:42pm Aug 15, 2010 4:42pm
Quoting ha-pattern
Agreed. This is more a reply to get an idea of where I need to go next before live trading, rather than recommendations for other people:
The notion of doubling your demo account twice is intended to place a high bar on your new trading methodology. Also, it is intended to be a type of speed bump and allow you a sufficient amount of time to thouroughly verify your methodology in a variety of scenarios. This is especially true if you are a new trader. A seasoned trader who is attempting a new system can simply place tighter stops on the new system or make observations of the new system for a period of time before actually trading it.
  • #30
  • Aug 15, 2010 11:31pm Aug 15, 2010 11:31pm
Quoting Troikaone1

Once you go live, your goal should be to make a minimum of $60,000/yr.

Having a $60,000/yr goal is pretty meaningless unless you put it in context!
  • #31
  • Aug 15, 2010 11:34pm Aug 15, 2010 11:34pm
Quoting CindyXXXX
What about if you knew why you were profitable or not? ...
Quoting Czech
It really depends why you think you're winning, in my opinion.

I think that's the key, you instinctively know when you're trading well and can clearly identify your edge, that's the time to go live (assuming you're overall profitable of course!).

I forget who said it originally but it seems to ring true, "if you can't identify your edge then it probably means you haven't got one"!

-
  • #32
  • Aug 15, 2010 11:52pm Aug 15, 2010 11:52pm
Quoting Troikaone1
The notion of doubling your demo account twice is intended to place a high bar on your new trading methodology. Also, it is intended to be a type of speed bump and allow you a sufficient amount of time to thouroughly verify your methodology in a variety of scenarios. This is especially true if you are a new trader. A seasoned trader who is attempting a new system can simply place tighter stops on the new system or make observations of the new system for a period of time before actually trading it.

Based upon your formula, I have doubled my small (£1500) dummy account twice in the last two weeks since changing to my new trading method. Are you suggesting that now might be the time to go live?

I have omitted to mention that I have been going through the forex learning curve for almost three years now and have paid several thousand pounds on various training course, books etc, (have also almost blown one real account 18 months back) so not a total newbie

GG
Now trading live
  • #33
  • Aug 15, 2010 11:55pm Aug 15, 2010 11:55pm
Quoting Gg33
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?
Markets change, sure, but simple strategies like the one you describe seem to stand the test of time.

Why not scroll back through a few charts and have a look, it's not like some indicator based systems where you need to see the indicator unfold in real time, you should be able to get a good idea.

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  • #34
  • Last Post: Aug 16, 2010 12:07am Aug 16, 2010 12:07am
Quoting Gg33
Based upon your formula, I have doubled my small (£1500) dummy account twice in the last two weeks since changing to my new trading method. Are you suggesting that now might be the time to go live?
Two weeks? Holy crap!

Yeah I'd hang fire on that live account for a bit if I were you, the probability of that being sustainable and not blowing up are about....zero!
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