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Some advice for copy traders

  • #1
  • First Post: Edited 10:03am Nov 16, 2016 1:01am | Edited 10:03am
I would like to share some advices to the copy investors here:

1. The growth should not be jumped up in the early months,later only small trades with small profits. Although these accounts have the big profit with low drawdown,but probably the jump up in the early months was the result of Hedging by using multiple accounts.

2. Don't choose the traders that using Martingale strategy without Hard SL.

3. The average profit pips per trade should bigger than 5, because the little slipage and delay could cause a big loss when using this kind of scalper strategy.

4. Don't choose the traders that often use the Stop and Limit orders, because the broker's platform could be different from each other, the slippage could eat your profit.

5. Better choose the active traders, the total trades bigger than 10 per months.

6. Better choose the real account with at least one year record, max drawdown below 20%, profit bigger than 50%.

7. Always use small investment to test first, invest big after you totally realize the strategy, max drawdown, trade duration time, profit factor.

Welcome any discussions!
Always Look Forward
  • #2
  • Nov 17, 2016 6:25am Nov 17, 2016 6:25am
I agree with all points above.

But I would add another one. For me the most important one!

Strategy used must be backtested heavily for 10yrs back with HQ and reliable history data. That is the only indicator of robustness and logevity of the system in the long run. But sadly majority of traders totally dismiss this point.

happy trading
  • #3
  • Nov 17, 2016 7:04am Nov 17, 2016 7:04am
Quoting PiranoTrader
I agree with all points above. But I would add another one. For me the most important one! Strategy used must be backtested heavily for 10yrs back with HQ and reliable history data. That is the only indicator of robustness and logevity of the system in the long run. But sadly majority of traders totally dismiss this point. happy trading
But the history is just history, the parameters of any system needs to be adjusted according to the current market
Always Look Forward
  • #4
  • Nov 17, 2016 7:12am Nov 17, 2016 7:12am
"But the history is just history, the parameters of any system needs to be adjusted according to the current market"

yes 100% right, you trade not in the past you trade now and in the future

EURUSD was in the last 10 years of a high of 1.48 this come never never never in the next 10 years

GBP BREXIT in the last 10 years ? come never never never again the next 10 years

backtest is for the function of a ExpertAdvisor or Strategy but not the wins or loss in the future never never never

can you trade in the past ? never never never !!
  • #5
  • Nov 17, 2016 7:43am Nov 17, 2016 7:43am
Yes, I know the common excuses why backtest is irrelevant!

Ok, let me ask you what type of trading strategy you use? A lot of traders use technical analysis.
Then, tell me please what technical analysis is other than predicting the future based on history?? Where do you find your resistance, support levels, fibonacci, abc, ... or whatever you use? You look at the history movement in markets, right.
So you don't belive backtesting and history is an indicator, but you still actually trade based on history? Please elaborate if i get this wrong.

All I wanted to say is, that if you do the backtest you can see where your system has weaknesess and strong points. Then you can adjust the settings and make a robust strategy that could "endure" all the market movements for the tested period. If you survive the backtesting period you basically eliminate the risk of losses in case history does repeat. And that is a significant (often decisive) factor.

Of course, that still gives you no guarantee that something new can't happen in the markets and you lose money. But the odds are better for you when you are preparet for the cases which already happened in the past.

Besides, history data is the only thing you have about the markets. What else is there to rely on?
  • #6
  • Nov 17, 2016 7:46am Nov 17, 2016 7:46am
Quoting wanglei3455
{quote} But the history is just history, the parameters of any system needs to be adjusted according to the current market
How can you adjust the parameters according to the current market? Every time you adjust the parameters you don't know did you make it better or worse.
  • #7
  • Nov 17, 2016 7:55am Nov 17, 2016 7:55am
Quoting ghostbiker
"But the history is just history, the parameters of any system needs to be adjusted according to the current market" yes 100% right, you trade not in the past you trade now and in the future EURUSD was in the last 10 years of a high of 1.48 this come never never never in the next 10 years GBP BREXIT in the last 10 years ? come never never never again the next 10 years backtest is for the function of a ExpertAdvisor or Strategy but not the wins or loss in the future never never never can you trade in the past ? never never never !!
Don't say never :-)
  • #8
  • Nov 17, 2016 8:07am Nov 17, 2016 8:07am
Quoting PiranoTrader
{quote} How can you adjust the parameters according to the current market? Every time you adjust the parameters you don't know did you make it better or worse.
Normally I will adjust parameters according to 1-6 months of back testing, 10 years backtest is good for an overall judge of profitable or non-profitable system, but the fine adjustment needs to be done according to the current 1-6 months market
Always Look Forward
  • #9
  • Nov 17, 2016 8:19am Nov 17, 2016 8:19am
Quoting PiranoTrader
{quote} How can you adjust the parameters according to the current market? Every time you adjust the parameters you don't know did you make it better or worse.
That is exactly the risk. We change our expectations of the market every second to every minute, along with it, the parameters of new trades, and current trades changes. What seems like good entries, stops, exits can and will become bad fairly quickly. We can temporarily align our expectations to the market, and the next moment it is gone - and hopefully you'd taken a profit, or cut loss quickly.
  • #10
  • Nov 18, 2016 12:54am Nov 18, 2016 12:54am
Quoting wanglei3455
{quote} Normally I will adjust parameters according to 1-6 months of back testing, 10 years backtest is good for an overall judge of profitable or non-profitable system, but the fine adjustment needs to be done according to the current 1-6 months market
Why 1-6? How do you know that the market cycle is 1-6 months? Are you just guessing or you have any analysis to tell you that?
  • #11
  • Nov 18, 2016 1:00am Nov 18, 2016 1:00am
Quoting StraticLine
{quote} That is exactly the risk. We change our expectations of the market every second to every minute, along with it, the parameters of new trades, and current trades changes. What seems like good entries, stops, exits can and will become bad fairly quickly. We can temporarily align our expectations to the market, and the next moment it is gone - and hopefully you'd taken a profit, or cut loss quickly.
I understand what you're saying.
But I'm not prepared to take that risk. That's what i call gambling. You're basically just "living" in between crashes.

Well if it works for you it's great. I also did that in the beginning but it didn't work for me.
  • #12
  • Nov 19, 2016 7:40am Nov 19, 2016 7:40am
Quoting PiranoTrader
{quote} Why 1-6? How do you know that the market cycle is 1-6 months? Are you just guessing or you have any analysis to tell you that?
Because our investment circle is normally 1-6 months, if you want to invest 1 year, than you need to look for 1 year history for the fine adjustment, if you want to invest for the next 10 years, then just use the 10 years history.
Always Look Forward
  • #13
  • Nov 19, 2016 8:51am Nov 19, 2016 8:51am
Quoting wanglei3455
I would like to share some advices to the copy investors here: 1. The growth should not be jumped up in the early months,later only small trades with small profits. Although these accounts have the big profit with low drawdown,but probably the jump up in the early months was the result of Hedging by using multiple accounts. 2. Don't choose the traders that using Martingale strategy without Hard SL. 3. The average profit pips per trade should bigger than 5, because the little slipage and delay could cause a big loss when using this kind of scalper...
Well said..
Prachait Saxena
  • #14
  • Nov 28, 2016 11:00pm Nov 28, 2016 11:00pm
Quoting PiranoTrader
{quote} I understand what you're saying. But I'm not prepared to take that risk. That's what i call gambling. You're basically just "living" in between crashes. Well if it works for you it's great. I also did that in the beginning but it didn't work for me.
Do you mean that regardless of the current market conditions, the method of entry, exit, stops should remain constant?
  • #15
  • Last Post: Nov 29, 2016 7:18am Nov 29, 2016 7:18am
Quoting StraticLine
{quote} Do you mean that regardless of the current market conditions, the method of entry, exit, stops should remain constant?
Yes, exactly. Because you never know what are the "current market conditions". So how can you adjust your method if you don't know if the change is bad or good.
What if you set it too risky so it doesn't "survive" the next market surprise? That is why i believe in good backtesting.
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