Sep 2, 2021
My first month of trading with CTI has finished. During this month I have traded Infinite Prosperity's day trading strategies on a real money account. I have also traded Infinite Prosperity's swing trading strategies on a demo account.
I am currently at evaluation phase for the $70K account. In evaluation phase CTI gave me a $17.5K real money account with two targets: 30 active trading days and 7% profit. Deadline to achieve the targets is 12 months (August 2022).
By the end of the month, I had 9 active trading days (30% achieved) when my strategy was signalling an entry and I was placing trades. The month started nicely with 4 consecutive wins. However, at the end of month my account balance was $17465 - a 0.2% loss.
I have placed 12 trades - 6 of them were profitable trades, while the other 6 were losing trades. My weekly self review showed that 11 of these trades were valid (placed according to my strategy and trading plan), while 1 of them was an invalid trade - resulting in a 0.25% loss.
The first month's target of learning to execute the strategy with military grade accuracy was achieved with only 1 mistake, as the self-review indicated. I am happy with that.
However, I am not happy with my DDP (daily direction prediction) strike rate. During training on historical data I could achieve a 70%+ strike rate, however, for the last month of trading my actual DDP strike rate was just 34%. It is not possible to trade these strategies profitably without at least 55% DDP strike rate. I understood that over time my DDPs got increasingly vague and based on a "gut feeling", as this was the only area where I didn't have written rules in place. I went on fixing this immediately.
The focus for September 2021 day trading will be on improving my DDPs. For September I will continue trading with reduced risk per trade (0.25%) because the target DDP was not reached. It means that my equity curve projection is now negative and there's no point in increasing risk as of yet. I will be looking to increase risk per trade no sooner than October 2021.
I understood that I will never be able to increase risk per trade with my swing strategies. It is a high risk/reward, low strike rate type of trading where results are dependent on market cycle (opposite of day trading). When I combined my historical swing trading journal with last month's journal, I saw that I cannot reasonably expect a strike rate higher than 35%. What this means that statistically at some point in the future I can expect to have 20 consecutively losing trades.
That would be OK when trading with my own capital, however at CTI I have a 5% maximum drawdown limit. 0.25% x 20 = 5%. It means that I will never be able to increase risk above 0.25%. And with such risk per trade, I can expect to make only 0.5-1% maximum profit per month. Since capital advancement levels are calculated at each 10% profit achieved, it could take up to 10 years to achieve a sizeable account level. It is too long for me and not worth my time. So starting from today I will be discontinuing swing trading on the demo account.
This, however, doesn't mean that swing trading is not doable on CTI. It is just about my strategy. If I had a strategy with, say, 6:1 average R/R and a 33% strike rate, that would be a game changer. Something to keep an eye on.
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