Rank: Newbie
Groups: Registered, Registered Users
Joined: 12/18/2007(UTC)
Posts: 5
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The Flippin New Guy has a question:
I am new to MetaStock and have just started backtesting some formulas.
I will be a trader who focuses on 2-8 week price moves, with a small portfolio, putting no more than 25% of the portfolio into any one stock. My number one goal while learning is preservation of capital, then move towards taking consistent profits out, with the hope of doubling my money within 6 months of starting.
What accuracy rate or percentage of winning trades should I find realistic? Obviously, more than 50 and less than 100, but is it 85% or 60%?
Any guidance would be appreciated.
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Rank: Advanced Member
Groups: Registered, Registered Users, Subscribers
Joined: 4/5/2006(UTC)
Posts: 129
Location: Norgate Data
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Typically for medium term trading like you want, less than 50% is fine.
To know why you need to understand the concept of expectency, average wins versus average losses, and risk multiples.
Regarding your goal for doubling money in 6 months, I think a realistic initial learning period is 2-3 years. If you are prepared to put in the work for 2-3 years to learn how to trade (and not be disillusioned by loss of your initial (limited) trading capital) then you'll succeed. Few do though and want to get the next big return only to be blown up when they don't have a trading plan/don't follow it/don't have experience to develop the right conditions regarding money management, stop losses and risk.
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