Put money on the line then post the results.
Am I missing something: Newbee question!
- Thread starter dadarara
- Start date
Put money on the line then post the results.
Pete, did you really have to QUOTE the entire post
-FastTrader
What time frame are you trading/testing in? The reason I ask is because say you are testing using 60min bars. The computer doesn't know if the high happened before the low. You should try the test on 1 minute bars.
The real question is does your method have an edge? Theoretically if you have a 1:1 risk to reward relationship you can still come out ahead in the end if you win 51% or more however you must calculate commissions and slippage into the equation.
This will only work if you have an edge with your method but the odds are very likely that you will lose money in the end with this risk to reward ratio.
Regards,
Tanp21
The real question is does your method have an edge? Theoretically if you have a 1:1 risk to reward relationship you can still come out ahead in the end if you win 51% or more however you must calculate commissions and slippage into the equation.
This will only work if you have an edge with your method but the odds are very likely that you will lose money in the end with this risk to reward ratio.
Regards,
Tanp21
dadarara,
I assuming your testing (realtime simulator) via 20 - 30 contracts is because you will trade with real money via 20 - 30 contracts when you first start.
If you have no intentions of trading with real money via 20 - 30 contracts...start now in your realtime simulator via what you'll actually will be trading with.
Although your not new to trading...your still a newbee to Eminis eventhough you've been using a realtime simulator...
start slow with 2 - 3 contracts based on the assumption you seem like 1 contract isn't suitable and you have the deep pockets to trade a lot more.
Simply...if you do have deep pockets and can trade via 20 - 30 contracts with real money...
resist for a few months or longer until your completely comfortable with trading 2 - 3 contracts.
I have a close friend that was testing the same simulator via 10 contracts and did extremely well (almost as well as you did via less contracts)...
However...in real money trading...he mistakenly went with the same 10 contracts...
different pyschological game...
he ended up blowing out his account in less than 3 months...
not good for the confidence after he had made obscene amounts via paper trading.
Thus, had he started with a few contracts...he may have had less pressure after a few losses...
which in turn may have provided him enough breathing room to make adjustments or get adjusted to trading with real money.
Good luck.
NihabaAshi
I assuming your testing (realtime simulator) via 20 - 30 contracts is because you will trade with real money via 20 - 30 contracts when you first start.
If you have no intentions of trading with real money via 20 - 30 contracts...start now in your realtime simulator via what you'll actually will be trading with.
Although your not new to trading...your still a newbee to Eminis eventhough you've been using a realtime simulator...
start slow with 2 - 3 contracts based on the assumption you seem like 1 contract isn't suitable and you have the deep pockets to trade a lot more.
Simply...if you do have deep pockets and can trade via 20 - 30 contracts with real money...
resist for a few months or longer until your completely comfortable with trading 2 - 3 contracts.
I have a close friend that was testing the same simulator via 10 contracts and did extremely well (almost as well as you did via less contracts)...
However...in real money trading...he mistakenly went with the same 10 contracts...
different pyschological game...
he ended up blowing out his account in less than 3 months...
not good for the confidence after he had made obscene amounts via paper trading.
Thus, had he started with a few contracts...he may have had less pressure after a few losses...
which in turn may have provided him enough breathing room to make adjustments or get adjusted to trading with real money.
Good luck.
NihabaAshi
Dadarar:
I am reminded of an analogy from Douglasâ book âTrading In The Zoneâ where he compares a width of a bridge you walk on to the number of contracts you trade. The fewer the number of contracts, the wider the bridge and âallowing you great deal of tolerance for errorâ and âas the size of a traderâs position increases, the width of our bridgeâ¦narrowsâ. Hopefully putting on 20 to 30 contract per trade for an account size of $30k to $40k with your methodology isnât walking on a thin wire for you where âthe slightest misstep or gust of wind could cause [you] to fall off the wire. Next stop, one mile downâ. I wish you best of focus.
Kermit
One thing you need to watch with the PFG Best simulator is that it is very good at giving you good fills. This is specially important if you are scalping for just a few ticks. In fact, it makes the difference between profitable and unprofitable trades.
Here is what I mean. If the NQ is Bid 1380.00 / Ask 1380.50, and in the real world you put a market order in to Buy, you will be filled at 1380.50. You immediately sell at market, you will get 1380.00, and you have lost .50.
The PFG Simulator does not discriminate between bid and ask and fills you at the last price whether you are buying or selling. This does not make much of a difference if you are trading for several points per trade, but as you indicated, you are scalping for a few ticks. Then the it makes a huge difference.
I could make millions on the PFG simulator by simply trading in a slow, choppy market. All I have to do is wait for someone to buy (Last price goes up to 1380.50) and hit the sell button. I get filled on that price, then wait for someone to buy (Last price goes down to 1380.00) and hit the sell button. It's like free money. But the real world doesn't work that way!
The only you can sell at the ask price and buy the bid is to have a limit order already in the system. If the market is currently at this price (1380.00 / 1380.50) you will notice in the depth of market are listed the number of contracts available at this price. These are limit orders already submitted. If you put a limit order in to sell at 1380.50 you go to the back of the line, and only after all the other limit orders are filled at that price are you filled. It may happen, but likely the market will move on before you get filled. For scalping purposes, you must plan to always sell at the bid an buy at the ask. If you do better than that, you're lucky, but don't count on it.
I think this is the answer to your "what am I missing" question.
Cheer,
kp
Here is what I mean. If the NQ is Bid 1380.00 / Ask 1380.50, and in the real world you put a market order in to Buy, you will be filled at 1380.50. You immediately sell at market, you will get 1380.00, and you have lost .50.
The PFG Simulator does not discriminate between bid and ask and fills you at the last price whether you are buying or selling. This does not make much of a difference if you are trading for several points per trade, but as you indicated, you are scalping for a few ticks. Then the it makes a huge difference.
I could make millions on the PFG simulator by simply trading in a slow, choppy market. All I have to do is wait for someone to buy (Last price goes up to 1380.50) and hit the sell button. I get filled on that price, then wait for someone to buy (Last price goes down to 1380.00) and hit the sell button. It's like free money. But the real world doesn't work that way!
The only you can sell at the ask price and buy the bid is to have a limit order already in the system. If the market is currently at this price (1380.00 / 1380.50) you will notice in the depth of market are listed the number of contracts available at this price. These are limit orders already submitted. If you put a limit order in to sell at 1380.50 you go to the back of the line, and only after all the other limit orders are filled at that price are you filled. It may happen, but likely the market will move on before you get filled. For scalping purposes, you must plan to always sell at the bid an buy at the ask. If you do better than that, you're lucky, but don't count on it.
I think this is the answer to your "what am I missing" question.
Cheer,
kp
