How Long to Collect 200 Trades at Your Pace?

[Fairman]

How Long to Collect 200 Trades at Your Pace?

Scenario: you want 200 trades before you judge a strategy. How long will it take at different frequencies?

At 3 trades a week: 200 divided by 3 is about 67 weeks, 15 months. At 5 a week: 40 weeks, about 9 months. At 10 a week: 20 weeks, about 5 months. At 20 a week: 10 weeks.

What does the sample tell you? With a standard deviation of 1.5R, 200 trades give a standard error of 1.5 divided by the square root of 200, which is 0.106R. An observed expectancy of 0.20R would be about 1.9 standard errors above zero, moderate evidence.

So a three-trade-a-week trader needs 15 months to reach this level, and a ten-trade-a-week trader needs five months. The faster trader learns sooner, but pays more costs. At 0.05R per trade, ten trades a week costs 0.5R a week, 26R a year, against 7.8R for the slower trader.

There are ways to collect data faster without overtrading. Backtest on history first. Trade the same setup on several pairs, if it applies. Use replay mode for practice. Use a demo account to log forward results, alongside small live size.

Also set expectations. Before reaching 200 trades, decide what you will conclude at 50 and 100, such as checking rule-following and costs rather than expectancy.

Be wary of a strategy whose trade frequency is so low that you will never know whether it works.

Exercise: compute how long you need to reach 200 trades, and decide whether the strategy's pace suits your patience.