What do you consider "real" profit?

Hi to all,
my question is simple, and I'll try to explain (sorry for english): what is time after which you can say "I've made money with forex treading?
I'm trying several EAs, all based on grid systems. I've get ideas from forums and now I'm trying to code something myself.

Talk about demo account; I start with 100EUR, and this is balance at the and of each week:
1st week: 131 EUR
2nd week: 121 EUR
3th week: 145 EUR
4th week: 139 EUR

Now let's talk about backtests and optimization:
I've made optimization through 3 years; best result is +1407 EUR
I use same settings for different time backtests:

3 yer: +1407 EUR
2 year + 409 EUR
1 year -188 EUR
1 month: 1.18 EUR

How can I understand if an EA or trading system is really profitable?
1 week profitable, 2nd not profitable, 3th week yes: when you can stop, calculate an average and say: yes, it is profitable, or not, it isn't?

Sorry for confusion and bad language.
Thank you very much!

It highly depends on what your trading looks like. E.g. being profitable over a period of 3 years sounds impressive. But if you've only taken 5 trades in those 3 years it doesn't mean a thing actually. Whereas being profitable over 3 months with 200 trades under your belt is something completely different and suggests that you know what you're doing. However, even strategies that are consistently profitable over a period of years can suddenly fail when market conditions change. That's probably especially true for automated trading systems (not my area of expertise). And then you have to adapt.

Another thing is your risk-to-reward ratio (RR) and the specific trading rules. Let's say you were extremely lucky and caught a gigantic profit of +25 % with your first trade but almost all of the subsequent trades were small loses of let's say 0.5 % percent. You could trade like that for months and still be on the profitable side. Does it mean you are a succesful trader? Hell no!

In the beginning it's easy to believe that you have made it. You (back)test some new strategy or EA and it looks great. But then you go live and find that all your profit gets wiped out in a short period of time. I more than trippled my first account in a month without having any idea of what I was doing. It was simply beginner's luck and the "right" market conditions. As soon as they changed I lost all the money within two or three days. That's where "no idea what I'm doing" and shitty trade management bring you to.

So in my opinion profitability not only reflects itself in numbers but also in a feeling of confidence. And that comes with screen and trading time. Do yourself the favor and learn about market conditions and price action. It will help you to improve and assess your winning and losing trades.

Some questions for you:
How many trades do you take per week/month/year?
What's your RR??
Do you have a consistent trading strategy that you follow 100% of the time?
Do you know what you are doing and why you are doing it? Or do you simply rely on an automated system?

Hi,
thank you for your comment...
I'm trying to apply a system based on grid similar to this:

0.3 lot buy
0.2 lot buy
0.1 lot buy
_______________ actual price

0.1 lot sell
0.2 lot sell
0.3 lot sell

I've coded it in simple EA.
For example 18 orders.

In my first tests stop losses are simply at the ends of the grid.

Yes, I've coded it my self (very very simple: cycle for ordersend and few conditions for closing all orders and restart).

Thank you!

Is that per week, per month or per year?

I would demo trade this thing until you have a certain level of confidence. Then go live with low risk (maybe 0.1 - 0.5 % per trade) and see how it goes. You can increase the risk when you've build even more experience and confidence.

James16 suggests to demo trade profitable for three months before going live. And stop live trading when you lost a certain amount of your funds. Go back to demoing until you have another three profitable months under your belt. Etc. Of course you have to fit this method to your personal trading (frequency etc.)

Hope this helps,
Hans

It is per month.