You backtested trading system told you to stop after two (or three) losing trades in a row or are you just assuming it's the "right thing" to do?
Losing money consistently
- Thread starter zbojnik
- Start date
You backtested trading system told you to stop after two (or three) losing trades in a row or are you just assuming it's the "right thing" to do?
Backtested and forwardtested and real-time tested. But the OP has chosen to "do the opposite" of what he's been doing as a means of solving his problem, so I see no point in going on with this. If he ever decides to develop a robust trading plan, I've provided one resource, earlier.
The market in general makes money by faking you out. You are simply taking all the fake outs like the rest of the herd. I bet as soon you get out the market continues on it's way prior to shaking you out. Are you letting profits build and then letting them come back to your price and through you for a loss?
Yeah market is faking me out. When it moves up I jump in long then it reverses and vise versa. So I have to do the opposite. Nope, never get profits lol.
Ok, so how do you resume trading after 2 or 3 losing trades in a row? At what point is it "OK" to trade again?
I am asking because in general and from what I've observed, I does not pay to stop trading after X losing trades in a row, for the simple reason that we don't know when the big winning trade is going to appear.
Here is a simple example from the Forex market.
Trade 1: -50 pips
Trade 2: -35 pips (2 losing trades in a row so we stop trading...)
Trade 3: + 375 pips (ouch, 375 pips that we did not collect because we stopped trading!).
See the problem here?
Excellent, you are keeping your losses under control while allowing your profits to run, keep up the good work!
Look at the streaks of losses...7 in a row!
Also note that 1 trade out of the 17 counts for all the profit, the rest just wash out. That's what trading is about, loads of small losses netted out with small winners, with the top few trades (say 5-10% of your trades) making your week (or month or year).
So to the OP, carry on trading , just make sure those losses are relatively small, run that winner , add to it, run it, but do PROTECT YOUR BIG OPEN PROFITS.
Also note that 1 trade out of the 17 counts for all the profit, the rest just wash out. That's what trading is about, loads of small losses netted out with small winners, with the top few trades (say 5-10% of your trades) making your week (or month or year).
So to the OP, carry on trading , just make sure those losses are relatively small, run that winner , add to it, run it, but do PROTECT YOUR BIG OPEN PROFITS.
Only if one adopts the GA approach to trading, and that's a questionable choice for making a living. In any case, even if one could make a living off results such as these, they are unverified. Therefore, they are irrelevant.
What the OP does or does do is entirely up to him, but I wouldn't plot my course on the basis of message board trades.
That's exactly what I keep telling some "people" here on ET, Visaria.
But no, apparently the winning rate of a system is the most important thing to them! These so-called traders are not "impressed" (to use their own words) when a system loses 5, 6 or 7 times in a row, for them it's a losing system, end of story!!
Oh boy