In Part 1, I bash prop firms pretty good but they are not to blame for some of my biggest mistakes. I am going to share with you some of the biggest mistakes I made while evaluating with the prop firms.
Number 1 – I didn’t forward test my algorithm for 6 months to see my results. VP told us to do this but I totally didn’t do this. I recommend forward testing and really paying attention to the data. For instance, if you know your win/loss ratio and amount of trades you anticipate on losing by knowing your maximum number of consecutive losses you can figure out a better risk amount since you cannot fall below the draw down amount.
Number 2 – The $EVZ was never in the 8 range for my entire evaluation. Remember the Dead Markets video… yea… I should have rewatched that a few hundred times and smushed my note pad in my face with all the Dead Market guidelines I didn’t follow. I wrote my notes down now and you can take a look here.
Number 3 – I think I could have made a better algorithm. I really just wanted to get the ball rolling and get some skin in the game but I definitely think you need patience, this is a quality I need to work on. This is probably why VP made a video called Patience. There are so many things in the VP videos that I can guarantee most No Nonsense Traders are missing something. I recently revisited the MACD video because I was backtesting an indicator called MACD0 ( which is a MACD – zero line cross ) and I noticed I had some really great results. That is weird since MACD usually sucks but if rewatch the MACD video VP explains that the zero line cross function of the indicator is a super gangster continuation indicator that has reaped him some big gains.
Yea, so… my point is to review the videos and don’t skip over anything. Take the time to practice all the little stuff and exam all the suggestions.
One thing I think VP says that could be inaccurate for some of us is that it took him 4-5 years to become a profitable professional trader but for us it won’t take so long. I am sure like everything in life the mistakes are part of learning something so it will probably take some of us ( two thumbs pointed this guy ) roughly the same amount of time as VP to become professionals.
Unfortunately I am the type that even if you tell me the stove is hot and don’t touch it… I am probably going to try and touch it.