When To Trade Live?









I often get asked when is the right time to begin to trade live. I would love to share a really cool technique and it is called “creating a sampling.” What does that mean and how do I implement? Let’s review:

Creating a Sampling

To try to figure out where you want to be in the future regarding your trading results you need to know where you are presently. As you know trading results are never measured on a trade by trade basis. This is something that took me a while to accept.

When I began trading and took a trade and made money 2-3 times in row I was pleased. However when I had 1 losing trade I scrapped my whole trading plan trying to find out why that one trade did not work totally disregarding the 2-3 trades that had gone my way. I needed to accept that trading is not 100% accurate. It does not exist. Trading losses are a part of trading.

The key is to follow the money management techniques that we share at our live event (small losses with higher gain potentials) and begin creating a sampling which enables you to make you are ready to go live so let’s talk about creating a sampling:

  • Choose a style of trading.
  • Look to virtually trade at least 10 trades (you can even have a higher sampling base).
  • Make sure they are trades that you would consider taking live (do not experiment by holding a trade through Earnings or Non Farm Payroll just to see what happens).
  • After you complete your pre-determined number of virtual trades:
    1. See what the ratio of wins versus losses was and
    2. When you are satisfied with the ratio of wins versus losses then see what the overall return is versus capital invested. You want to make sure you have not succeeded in 8 out of 10 trades and the two losers wiped out the 8 successes (it can happen).

When you reach a win ratio you are pleased with (mine is roughly 77% of my trades are successes) and your return exceeds the losses, you can then consider trading live and you must start trading live in the same fashion that you virtually traded. For example if you virtually traded one contract and took $2,000 and now your account is $4,000 you will begin trading live with one contract.

With time I did realize that there are really one two reasons why trades go nuts and that could be either a major economic events like FOMC or Non Farm Payroll. Aside from that it could be something that I call “crazy” and “crazy” does not happen often.