When can a newbie or intermediate trader Execute trades with real money?
1. For real execution a system has to be in place that in addition to detailed rules for an execution process performs that well that it is still net positive on low risk if one deducts 20% of the profits.
2.This system needs to be back-tested on a minimum of a thousand sample size and real time forward-tested with actually pushing a keyboard button (not pretend! push an unassigned button for entries and exits) on a minimum of 250 trades
3.the system needs to be suitable to the traders psychological mental makeup and needs to be principle based
4.execution can only be within the -20% parameter (to be expected human error factor) if the $ amount risk is accepted by the traders mind
as such lowest risk instruments per tick are ideal to start out with like micro contracts on future indices
consider all costs (commissions)
and return to the drawing board if your theoretical system is losing its edge in a case of reducing its profitability by 20%
5. A trader needs to be properly funded to start out trading with real money
you need to be able to trade based on the rule of a maximum risk exposure of 2% of total capital on an individual non related trade
6. do not start out trading in an extreme market environment phase!
7. Determine ahead of time how long you will be trading with a minimum sample size of 20 trades and ideally a set of 2-5 sets of these 20 sample size blocks = 60 to 100 trades, to get an accurate testing sample on how well the system performs against the market and how well you perform in comparison to your system
8. When the sample size is at it end, make a thorough examination in addition to your daily journaling and go back to the drawing board for a bit to improve system edge and rule settings of your execution process rules
condition these implementations through paper-trading and back and forward testing and when a satisfactory point is reached set up another real execution sample size