u/CandelaNorth

I've been forward-testing a trading algorithm that's using 3 different modules:
- Market scanner - scans the markets for trading opportunities based on predefined criteria
- ML validator - uses machine learning to validate the signals generated by the market scanner
- Trade management - handles entries, exits and risk 

After 3 weeks of forward testing, here are some early observations:
- closed trades - early performance is weak: 28% win rate from 19 trades vs ~66% in backtests (small sample, so not conclusive yet)
- active trades - currently +1.2R across 39 open positions, mostly long exposure

The current exposure is heavily long, so outcomes will depend on broader market direction over the next period. The backtest shows that 3-4 weeks of drawdowns are common for this model, so this phase is within expected variance.

Positive takeaway - trade management behaves as designed with taking partial profits and adjusting stop losses consitently.

Next steps:
- wait for open trades to play out and see how they resolve
- narrow down the scope of crypto assets to the top 30 by market cap to reduce the noise and focus on more liquid assets
- change provider for stock the stock klines, rebuild the model and re-initiate the forward testing

Any other thoughts or comments?

I took my first trade after seeing a bullish pin on a 5-minute chart, just a minute after my trading account was approved. I was on the train to Zurich, convinced my life was about to change.

I entered and a few seconds later my position was 400 Swiss francs in profit. It felt unreal for about 2 minutes - then the market reversed and turned that profit into a 200-franc loss. I panic-closed the trade nearly at break-even. My heart was racing at 170 beats per minute, and I was drawn to the adrenaline. A few weeks later I blew that account and stopped trading forex forever.

What did that experience actually teach me?

• Signal (opportunity) - bullish pin on the 5-minutes timeframe alone was not enough to put real money on the line
• Position size - I did not calculate how much I was willing to lose on that trade. I just used the pre-defined order size which resulted in very high leverage
• Trade plan - I had no idea where to take profit and what would invalidate the trade. I closed this one manually despite being paralysed by fear, but in many others I let losses run because there was no stop loss. I did not have a take profit either. 400 francs would have increased the value of my account by 20% - and still, I wanted more.

I did not have an edge, and it took me years to build one - through studying, testing, and seeing what actually works. Even then, I was still making mistakes. I kept breaking my own rules: overtrading, moving stop losses to avoid taking a loss, and taking revenge trades that usually made things even worse.

Curious how others see this: is your biggest problem finding setups, or actually executing them properly?