Stocks. Both long & short.
A Retail's Day Trading Experiment
- Thread starter ironchef
- Start date
You mind explain why the winning rate sets of your alarm bell?
It is "real time" paper trade. Execution is no different than clicking on a real trade and I used the price displayed on the trading screen just prior to click as the filled price, bid for sell ask for buy. How realistic? I don't know.
Trade decision is discretional using price charts, MTF etc.
Max DD at $200 is 0.4% per trade.
How are you position sizing?
Are you using a hard stop; set when you enter the trade?
Exit with profit at a target or do you have a method for letting winners run?
Will trading with a live account trigger emotions that don't show up in Sim?
Do you have a set of rules and how many times during your test did you break or bend your rules?
Let me backup by asking another question. 1500 trades over 48 trading days??
IMO it is highly unlikely you could trade similarly in real time ... and as well profitably to the tune of 85.4% or anywhere close to that.
The biggest issue of paper trading is no emotion involved with real money. Emotional problems and the mental capital drain in real trading takes a huge toll on human mind and body, unless it’s algo/automated trading.
I am actually more anxious with winning trades. One big win I am mentally/emotionally done for the day. LOL
I am actually more anxious with winning trades. One big win I am mentally/emotionally done for the day. LOL
First, you have to fill. Touching a price is not a fill. There is a que on which orders fill. You get in line with others. Many of those in line never get filled unless it trades through that price. Using the opposite side, like you are doing, is a good start. But you still need to "get in line".
Not getting "instant" fills is an issue. Do you change the price? Do you get filled? What if after the price change you do not get filled? Repeat? Is the original premise still intact. There so many "systems" with 1000's of trades that rely on "insta-fills". Consider if you get the magic instant fill, x 1000 that can add up to a lot of profit.
If you want to be realistic, use Buy @ Ask + 1/2 the spread; Sell @ Bid - 1/2 spread.
Second issue is the grind. You can do it for a month or so, but after that it takes is mental and physical toll.
Third is the drawdown. Trading is pretty easy when you are green from the get-go. But consider trying to start down 10% of your initial capital. How does your "method" change? Not at all? Sure OK. but how long until you are green enough to make worth your while.
Best of luck on your Sisyphus endeavor.
Because it’s retail crack.
You have to be more right than wrong and it’s most likely due to exiting trades early with 1:1 or at most 1:2.
But you haven’t even quantified how much you risk for your reward. The method won’t scale. Each trade comes with more emotional baggage than necessary for folks that gravitate first to high WR form bad habits.
It’s harder to focus on high R:R for it builds what every aspiring trader lacks and that is patience & discipline. Having a system with higher R:R allows you to be wrong more than right and still be profitable. It’s also easier to get your WR up having that as a foundation.
Did you calculate commissions and fees? 1500 trades in 48 days would rack up a significant dollar amount, depending on the broker.
Paper trading is great to learn a platform, not so great for future expectations on live results. The emotion is a major factor on live compared to paper trade.
Paper trading is great to learn a platform, not so great for future expectations on live results. The emotion is a major factor on live compared to paper trade.
@Jzwu2017, @rb7, @Sprout, @SunTrader, @deaddog, @Bad_Badness,
Thank you all for your thoughtful comments. I certainly have my own doubts and that is why I created this thread. Here are some of my own thoughts:
1. In general, when something is too good to be true, it is not true. This almost borders on that.
2. I am no genius nor an elite trader by any stretch of your imagination. It is very unlikely that a dumb trader like me can come up with a winning day trading method when millions tried and failed.
3. Every day, after the market closed, I re-looked at all of the charts, every entries and exits, re-traded them based on "ideal" entries and "exits". The "ideal" trades were about twice as good as what I recorded. That is a red flag.
4. I expect when I go live, it will be much worse. Day trading is, I take two large numbers subtract one from the other and call the very small difference "profit" or "loss", I am not naive, it doesn't take much, e.g., time lag, non-fill... to go the other way. That is another red flag.
5. The method requires aggressively limiting losses, so every day at least half of the trades were small losses. Profit came mostly from one or two good runs. Letting profits run is extremely important but very tricky because of aggressive loss taking and in real time when things moved around rapidly. This is the third red flag.
6. Taking loss is not an issue with me, my options win rate is around 30% so I can take loss. The real psychological issue for me is I need to be decisive whereas in options, I am very deliberate before pulling the trigger.
7. It may be a mirage?
Thank you all for your thoughtful comments. I certainly have my own doubts and that is why I created this thread. Here are some of my own thoughts:
1. In general, when something is too good to be true, it is not true. This almost borders on that.
2. I am no genius nor an elite trader by any stretch of your imagination. It is very unlikely that a dumb trader like me can come up with a winning day trading method when millions tried and failed.
3. Every day, after the market closed, I re-looked at all of the charts, every entries and exits, re-traded them based on "ideal" entries and "exits". The "ideal" trades were about twice as good as what I recorded. That is a red flag.
4. I expect when I go live, it will be much worse. Day trading is, I take two large numbers subtract one from the other and call the very small difference "profit" or "loss", I am not naive, it doesn't take much, e.g., time lag, non-fill... to go the other way. That is another red flag.
5. The method requires aggressively limiting losses, so every day at least half of the trades were small losses. Profit came mostly from one or two good runs. Letting profits run is extremely important but very tricky because of aggressive loss taking and in real time when things moved around rapidly. This is the third red flag.
6. Taking loss is not an issue with me, my options win rate is around 30% so I can take loss. The real psychological issue for me is I need to be decisive whereas in options, I am very deliberate before pulling the trigger.
7. It may be a mirage?
The red flag is in the rapid moving and keeping up with it non stop while a trade is on. No bathroom break 
. Cutting losses and letting winner run is fine.
Just to be clear, discretionary trading can work when you have a plan, YOU CAN ACTULLY follow, emotionally, technically and logistically, it is just for the young and energetic and hard to sustain for years on end.
. Cutting losses and letting winner run is fine. Just to be clear, discretionary trading can work when you have a plan, YOU CAN ACTULLY follow, emotionally, technically and logistically, it is just for the young and energetic and hard to sustain for years on end.