Quote from jinxu:
You seem to forgot about my first winning streak in early August where my account grew from $700 to $2100 in two weeks and is documented here:
Alright. I am going to explain why I think your system is not a winning system.
Let's start with stages that a trader goes through...
Stage 1: frequent losses, mostly losing trades. Most noobs start here for months to years.
Stage 2: Mostly winning trades... say 4/5 trades are winners, but either poor money management, or averaging down, or just plain bad trades cause that 1 trade out of 5 to more than cancel out the winners. Some newer traders get here, but many give up in stage 1. You are likely in this stage.
It is also in stage 2 that most newer traders spend trying to convince themselves that their 'system' is one tweak away from being a consistent winner.
Most traders never get out of stage 2
Stage 3: Winning trades ($ value) outweigh losing trades ($ value). There may be more losing trades than winners, but the aggregate amount makes the system as a whole a winner.
Now at what point can you say you are firmly in stage 3? Well, that is subjective. You definitely can't say it after 20 trades, imo... You probably need somewhere around 500 trades to 1000 trades where an independent observer could say "Yeah, that trader has finally made it".
Not surprisingly, most traders never get to stage 3.
If you look at your post that I am replying to, imo, it is fairly clear that your "system" has not proven itself to be a winning system. Sure, every system has it's run of wins and losses, and imo your run from 700 to 2100 was just a lucky aberration. Your system also has severe weaknesses if you can blow that 2100$ up (as you apparently did). That is why I say you are in stage 2.
Will you ever make it to Stage 3? I don't know. But I think it is clear to independent observers that you are not there yet.
g
p.s. I don't know why you say undercapitalization is causing you to fail... what amount of starting capital do you think you will need? And how do you plan to get it? How much does your real job pay?
. I'll admit that some of my breakthroughs were discovered by accident. Almost by pure chance or luck. It's not like Thomas Edison, where you can put in enough time to systematically test out hundreds of materials and eventually find one that can be used in a light bulb. But more like Isaac Newton, who got the idea for gravity from watching an apple fall from a tree. Designing a trading system is like looking for a pirate's buried treasure chest. To find it, you have to know where to look otherwise you're wasting your time. Study and experience are means to help you figure out where to focus your search. If I didn't had that six years of experience to guide me, I wouldn't have been able to develop a working system this year.
