Swing Trading Strategies & Stock Picks Since 2003

I received the following email from a trader struggling with trading for a living.

Ho John,

If possible I would like you ask you for a few questions. I’m sitting on futures USD/GBP. Trying to trade for living. The main problem now is that I have again big drawdown during that week. The same I had during first week of March contract. All the week I had very bad results, which caused me to think that my strategy is not working. Well I took 1 month to re-shape strategy and make it better. Then I’ve returned to trading step by step I had small profits and again gained trust to new updated strategy. Now again the whole week during which I can not understand anything. It seems that that first week of new contract is not “tradable”. Is it correct ?

The second question can you advise what software could be used to test strategy ? apart from manual testing. Unfortunately now I can afford to myself only free software if you know such and can advise.

Sorry for writing that message, but I have not a lot of time left to start trade normally as all my financial recourses are coming to the end and I do not have another way other, but to trade.

Thank you in advance for your kind support, Kind regards, Andrew

To answer Andrew’s first question, I know of nothing in regards to the first week of a new futures contract which would make it any more or less tradable than any other time. There is, of course, the mechanics of folks rolling over from one contract to the next, but that’s a minor thing.

As for the second question, I don’t know of any free system testing packages. I personally use a combination of MetaStock and Excel. If you have the skills, system testing in a spreadsheet is a good way to go as it can be extremely flexibile and you can easily drill down into the results. Readers of this post are welcome to make suggestions if they have any.

Now for addressing the larger issue I think Andrew has here. My guess is that he is under-capitalized to trade for a living. If he cannot aford to pay for a good software package for system testing he’s almost certainly doesn’t have enough money to trade for a living with any likelihood of success.

At the same time, the lack of a solid system is a major problem for Andrew. He should have had one well tested both backwards and forwards before even considering trading for a living. You absolutely do not want to start trading for a living without one.

As a last suggestion, I would strongly advise Andrew to get a job and make a living that way for a while. Being an inexperienced trader – as he clearly is – and having to produce profits to live on is a recipe for disaster. The stress is enormous and tends to lead to very bad things happening. I realize this is probably no what Andrew and others in his situation want to hear, but I would be remiss if I didn’t point out that their chances for success in such a situation are extremely low.

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