In daytrading slippage can be a very important cost factor. I always used 1 tick slippage in and 1 tick slippage out. If your average profit per trade is small, your real profits can be losses in real trading. Better go for the worst case scenario in backtesting.
High Risk High Reward Trading
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In daytrading slippage can be a very important cost factor. I always used 1 tick slippage in and 1 tick slippage out. If your average profit per trade is small, your real profits can be losses in real trading. Better go for the worst case scenario in backtesting.
Wrong. Number of trades is irrelevant, average profit is. If you make average 25$ per trade you will end losing money, no matter how many trades you do.
Wrong.
If you take a 50% drawdown ,you should not be trading anyway. That's more correct advice I think.
Everything in life is a waste of time if you cannot learn anything from it. Backtesting can give tons of good info. But you should know how to use it. So backtesting is not the crucial element, the backTESTER is.
Well pointed out and good clarification of what i was really thinking instead of what i posted.
I trade my best known 180 signals per year. I have other profitable signals that i could trade, upping my signal count to say 500, but those signals aren't as good, the expectancy on those is lower. Slippage would be eat a greater % on those weaker signals.
If i could trade 500 signals that were all as good as the 180 i currently trade, then i would jump all over them.
I sometimes have the same problem: writing something different from what I wanted to write.
I think both statements are too general.
If you are confident in your edge then you should take whatever drawdown level you are comfortable with (while bearing in mind that future drawdowns could be greater than past drawdowns).
Personally i like to start out with a relatively small trading account (relative to my networth), then i like to trade it at high leverage
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I agree, I do the same. If I wipe out I still have money to start again. But as leverage is much higher wipe outs are coming much quicker too.
I am lucky that I have excellent stats about my trading performance. For each trader options are different depending on the stats of their trading performance.
Weekend drawdown update
======================
The account is currently in 15% draw down from high water mark made in the middle of February.
Largest drawdown so far this year has been 23%.
I am expecting a drawdown of between and 30% and 60% at some point this year.
Hopefully it wont be any bigger than 60%.
Average largest yearly draw down has been 42% from past testing.
Will post PnL for March at the end of the month.
Some rules & beliefs for my trading:
Trade with the momentum/trend
Run winners and cut losers.
Take every single trading signal, never ever miss even one.
Expect way more losing trades than winning trades.
======================
The account is currently in 15% draw down from high water mark made in the middle of February.
Largest drawdown so far this year has been 23%.
I am expecting a drawdown of between and 30% and 60% at some point this year.
Hopefully it wont be any bigger than 60%.
Average largest yearly draw down has been 42% from past testing.
Will post PnL for March at the end of the month.
Some rules & beliefs for my trading:
Trade with the momentum/trend
Run winners and cut losers.
Take every single trading signal, never ever miss even one.
Expect way more losing trades than winning trades.
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