[Resuelto] Consistently Profitable Trader?

The best metric will be your equity curve.  However, it isn't that it is simply moving upwards.  It is the recognition of seeing your edge work, as well as the resilience of seeing the edge recover from drawdowns that are naturally associated with your edge (because it isn't just about winning right?).  This means observing how you can recognize when your edge is present, for action, and when it is not, for no action, and seeing these effects work through a variety of market environments.

The variety of market environments is very important because any given, day, week, month, or year can significantly shift underlying variables which need to be accounted for.  March 2020 - Sept 2022 with the increase in volatility, summer dolldrums and market stagnation effects, etc.

When you recognize that it is alright to have a loss, since you already know the loss is recoverable, that is a good sign.

Note though, a good money management system can also assist in accelerating the process by refining an edge, but also may serve very well for capital preservation when we do not perform as well as we should an may need a break.

Hopefully helpful and good trades to you!

Great, thank you for the feedback, well done.  Equity curve is the measurement, got it! 

Now..... do you have feedback to help determine the SAMPLE SIZE needed to be somewhat accurate.  I'm sure anyone could string together a few days for a positive slope and edge identification, but that is too small a sample size to be accurate.  Or, on the other hand, someone could wait for 10 years to get a huge sample size that would be almost perfectly accurate and would clearly show your edge.

What do you think is a good sample size to shoot for (how many trades/days/weeks/months/years/decades) to see a positive sloping curve before we even BEGIN the scale process?  I understand it will be a continuous process of evaluation once you start scaling, but I am struggling to see WHEN to know it is time to initiate the scaling process.  

Your comments are greatly appreciated, thank you!!!!

Hi Mark, I think Eric gave you excellent hints on what evaluation metrics to use - namely revolving around market cycles. For example, you want to make sure your trading is profitable in ranges as well as in trends. But it also depends on how often you trade. For example, if you're an intraday trader and take a few trades per day then you'll see all market environments (ranges and trend days) relatively soon and can confirm readiness to scale up within weeks to months. On the other hand if you only take 1 trade/day on average and maybe using HTF like 4hr or daily bars then it will take a very very long time to experience bull and bear trends. Statistically speaking, 30 trades per market cycle should give a good idea about how your trading is going. 

If all else fails, consider the wisdom of the Matrix:

Happy new year!
CH

Got it!  Thank you Eric and Mr. Carpet.  I had a chance to process this in my mind last night, and I think I get it now.  I've got 724 trades under my belt over the last 6 months or so, NOT consistently profitable during that whole stretch, but if I shorten the window to the last 6-8 weeks,  then yes, I'm about .25% ROI per day (day trading on 5 minute chart).  I've traded breakouts, tight trends, broad trends, and trading ranges, and am comfortable identifying and trading all of them.  I still make a ton of mistakes and have plenty of losers, but I can feel the confidence increasing along with the ROI, which is actually a little concerning for me since I was losing for so long getting through the initial part of the learning curve, I'm just not sure if it is luck or skill.  I was looking for your input because I don't want to be too human and let my ego tell me how great I am now and to scale up and make millions LOL, I needed you guys to temper me and help me get an outside perspective on when and how to start scaling.  

Again, thank you so much, I owe you a beer sometime...