Santa Comes early. Whatever you do, you can’t stop falling…

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This entry is about the trial run I undertook in order to obtain a funded account.

I called the demo, “The Reference“

They wanted 10% gains for the 1st month, with less than 10% maximum draw down.

This is the 13th trading day, and I am calling it a month. The maximum draw down never reached 3.5%.

About the reality of trading with a Demo, in particular on the Demo3 server of IC Markets:

Just today I thought of having another pass at a hybrid hedger, which would leave pending orders with the broker in case your system goes offline, but with IC markets I could never fully overcome their Hyperactivity account suspension stupidity.

Plus their demo3 server goes offline frequently and for long periods leaving gaps in the data. Demo 2 had no such issues.

Since I mentioned hardware and software here, I also had to buy a WiFi signal amplifier at home after I moved the computer desk. This comes with bandwidth loss.

About the reality of trading with a daytime job:

You would certainly need a job where you are allowed to have your cell on and enough time on your side to be able to follow and interact with the changes. Maintenance was a conscious decision by me, but it has its etwork/coverage issues with the lot of moving about and its tons of rebars to phase you out. I certainly would not be able to do this in catering or with an office job.

I thought I made some kind of a record when a back test on MT4 came back with a Profit Factor of 45,000+

Durging this test with the 100:1 leverage, I was switching off between two accounts and somehow my 3 lot size went to 1 micro lot, and I opened with that. Later I just closed out this odd lot, not paying attention to the actual balance, and so I ended up with my first losing trade. I think it was probably 3 cents of a loss with the commission factored in.

Profit factor can only be figured from the comparison of your losses and gains, so you need to have a miniscule loss (especially if you are like me, and only like taking losses on your own terms.)

I was already pushing 200,000 profit factor and 1.4 Sharpe ratio, when my second accident happened.

This time I was trying to read off the market maker level with a remote view of my desktop and I ended up dragging an open orde, and not realising this, I clicked on a stop loss that was ultimately hit. Without this move my profit factor and Sharpe would had kept on going up in the skies.

These were the rules:

1. Challenge: the first 30 days

The Challenge is a 30-day simulated trading account in which you have the opportunity to demonstrate discipline in meeting the money and risk management objectives. Your trading style is completely up to you, we do not set any limits on instruments or position size you trade. We measure your trading performance based on the Trading Objectives. 

2. Verification

The objective of the Verification is to verify, for the last time, that you have a solid and consistent strategy.  The differences in the Trading Objectives between the Challenge and the Verification are in the Profit Target and in the Time Period. The Profit Target is reduced by 50% and the Trading Period is extended to 60 days. 

3. Funding

As soon as you meet the Trading Objectives of the Challenge and the Verification, you will get a funded account. Now you can start making real money. The only objectives you must follow are the Maximum Daily Loss, Maximum Loss and Minimum Trading Days. These three objectives are protected by our proprietary software. We no longer require you to meet the Profit Target or other Trading Objectives.  
Trading objectives/rules

Trading Rules/Objectives:
Minimum trading days:

To meet this objective you must trade at least for 10 days during the testing period. At least one position must be opened in each of these days.

• A trading day means a day when at least one trade is executed.
• If a trade is held over multiple days, the day when the trade was executed is considered as the trading day.

Positive Days:You must reach at least 50% of positive days compared to the number of negative days, where a positive day is considered to be such a day where the value of the account balance is higher at 23:59:59 CE(S)T than it was on the same day at 0:00:01 CE(S)T. 

Maximum Daily Loss

This rule can also be called “trader’s daily stop-loss”. According to our rules, this is set as 5% (10% in case of an Aggressive version) from the initial capital value. The rule says that in any moment of the day (CE(S)T – Central European Summer Time), the result of all closed positions in sum with the currently open floating P/Ls (profits/losses) must not hit the determined daily loss limit. The counting formula:

Current daily loss = results of closed positions of this day + result of open positions.

For example, in a case of the Challenge with the initial capital of €40000, the Max Daily Loss limit is €2000. If you happen to lose €1000 in your closed trades, your account must not decline more than €1000 this day. It must also not go -€1000 in your open floating losses. The limit is inclusive of commissions and swaps.

Vice versa, if you profit €2000 in one day, then you can afford to lose €4000, but not more than that. Once again, be reminded that your Maximum Daily Loss counts your open trades as well. For example, if in one day, you have closed trades with a loss of €1000 and then you open a new trade that goes into a floating loss of some -€1200 but ends up positive in the end, unfortunately, it is already too late. In one moment, your daily loss was -€2200 on the equity, which is more than the permitted loss of €2000.

Be careful, the Maximum Daily Loss resets at midnight CE(S)T! Let’s say that one day you had a profit of €600. On the same day, you have an open position with a currently floating loss of €2500. On this day, the maximum daily loss is not violated. The current daily loss is €1900. ( €600 closed profit – €2500 open position). However, if you hold this position with the open loss of €2500 after midnight, the daily loss limit will be violated.  This is because your previous day profit doesn’t count to a new day and the open loss of €2500 exceeds the max daily permitted loss of €2000.

& these are the days

Take the back seat and ride… in time…

Hi,
Thanks for thinking of me. I don’t understand these draw down values, I never have. To make money you need to take risk. What if it something goes against you by more than 10%? Than you are disqualified? From what?I am not the watching paint dry type.
Best Regards,Achilles

You are right, I did not mean to come across rude. Where and how get onto this program?

Another fellow trader in London that I connected with via LinkedIn told me about it. There is a fee to do the challenge and strict parameters but if it works, you get paid to watch paint dry.

Hi,
That’s a lot of rules to live by. Are you sure that these people do not just try to live off the nomination fees?If you care to wager the fee, we could do a trial run, sure.Is this MT4? I would need my trail stops running.

Hi
I will try to make this a good reference account. You never know. When you have plenty of funds, it may make sense to trade like this.
Achilles

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The server has been hanging for the last 16 minutes

Was offline for almost an hour. Just as I remembered. I feel doomed.

The usual 1h no connection.

28 minutes this time.30 left to FOMC.A lot can happen in 28 mins.

I’ll push on for now. I hope I won’t regret it.

Every dog will have its day, I’m obeying the rules for now. It does not make much, but it does not lose much either. Especially if after getting your two strikes you suspend trading to regroup. It is always easier to reconsider when you do not have any open positions.
16 pips has been a good choice so far, but I do cut positions too early, so I need to move out to 4h, have some plan and perhaps make the trail stop less aggressive.

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Understood. It looks like your system is working and compliant with the restrictions imposed. Like I said, somewhat restrictive but the potential funding is for a larger acct which makes the absolute gains more attractive than the percentage gains themselves.

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Let’s talk about the Kite

I should had started a new demo effective of the next day, for the new, more restrictive rules would have to shine through the stats not in a shape of an average for the entire period.

I did not. And I got into trouble. I did not read well enough the market maker intentions, I thought I had more time to play longs. I had two, 3-lot positions open. I clicked on an at market close at around 100 gains… Nothing happened, the demo was hanging again. When it came back, it closed out the position with a 0.7% loss. That’s what I call Russian Roulette.

I got pissed, and I started burdening the account to see what a 100:1 can take. I knew I still had time to recover.

On the 16th day I cut the balance above 10% gains still fulfilling the listed criteria of gains, losses & draw downs.