Why Many of Streak Strategy Results after brokerage final p&L is Negative
There are very few inefficiencies in the market and those too have small profit margins.
Most “strategies” are actually just a coin toss in fancy disguise. As all coin tosses, the odds inevitably turn to 50% as the sample size increase, so do all these “strategies”.
Now, with added charges for each transaction (impact cost, transaction cost, taxes, brokerages & error trades), this is going to be a big negative p&L.
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then what is the solution for this ?
There isn’t, that’s what makes trading so hard. 99% of the things/ ideas that you may test won’t work. There is no easy way around this. You have to go about and test and see for yourself till you find something that actually works.
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Ok, imagine if i expecting 1000 Rs profit, then i want to earn 3000 + right?
sorry boss, what the hell does this mean?!
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I think he meant to say if he makes 3000 rupee profit instead of 1000 he can cover all the charges you mentioned and turn the strategy to net positive and make boatloads of cash.
Ah, i see…
If it helps, I pay 14% of my profits to all charges (impact, slippage & error not included since i can’t accurately track them).
The point here is, any system that you follow should provide profits that far exceed charges. It really isn’t worth it if you pay half or more of your profit to charges.
Just brokerage and taxes shouldnt do that to a half-decent strategy. Normally slippage is what kills high frequency intraday scalpers (despite their great looking backtests).
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Look to build strategies that takes lower number of trades at the expense of accuracy. In real world trading this will prevent the transaction cost from shooting down your strategy. Compensate for the lower accuracy with higher risk rewards.
Scalping and any other form of high frequency trading often ends up giving all that was made to the broker, exchange and govt.
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This is the most accurate response.
Streak shows us the mirror, and tell what we are doing wrong, and how misguided we have been in our own head or using excel math taught to us by influencers.
Best thing I have learnt using Streak for 2+ years is to build strategies that truely identify large movements and just aim to catch them as accurately as possible and as reliably as possible.
This has reduced my trading frequency, increased my net gains per quantity traded and has overall kept me in the very green region.
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There are a few reasons why Streak strategy results after brokerage’s final P&L may be negative:
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High Daily Strategy Cycle: In Streak, you have the facility to select the daily strategy cycle upto 100 cycles. 1 cycle is entry followed by respective exit. But when you account for the brokerages due to large strategy cycles, the overall PnL can be affected. Ensure you are assigning realistic parameters while trying to find a profitable strategy.
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Not assigning a suitable Risk to Reward ratio based on the instrument traded: When you create a strategy it is necessary you keep in mind the type of instruments that are added to the strategy and the kind of R:R that must be provided for a given strategy. It happened most of the time to me that I kept a smaller stop-loss in options trading, which eventually just hit my stop-loss. Suitable/sufficient SL must be given to a trade, for it to pan out and move in your favor.
Overall, the primary objective of the Streak backtest here is to convert your trading ideas or concepts to a systematic strategy and to check/validate them based on historical data. As you find or shortlist a good strategy, you can further test it in paper trade to check the performance in live market data.
I think the primary objective of backtesting is to determine a profitable trading strategy while minimizing risk. This can be achieved by decreasing the number of trades and the associated brokerage, which can further enhance the strategy’s profitability. Additionally, a reduced number of trades can lead to better risk management by focusing on making high-quality trades and avoiding unnecessary ones.
Also by executing high-quality trades using a well-tested strategy, you can achieve profitable results while reducing the number of trades conducted.
Are there any traders who are consistently profitable using streak?
In my opinion some Streak strategies may be designed for high-frequency trading, which can result in increased brokerage costs. These costs can eat into any profits made by the strategy, leading to a negative P&L.
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Hi @Vivek_Naren, @Ashwin_kumar1, @Gnome, @VijayNair
In this blog below, we have taken a dig into the most common reasons of ending up with negative backtest results even though you may have a good strategy to begin with!
Let us know if we’ve missed any!
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Its just generic information
Do you have the exact percentage of traders who are profitable using streak last FY?
We know 11% of traders are profitable from SEBI’s report.
Ya, the 90% are tips-based influencer-driven get-rich-quick kind of traders in the markets, most of whom take trades based on telegram groups and random charts/options chain and hunches.
The remaining 10% will be knowledgeable disciplined traders.
Streak is just a platform of a matter where YOU yourself put in your strategy, if you put garbage/non-sense you will get garbage, if you put in great ideas and logically/statistically sound strategies you will get great results, they are just a tool/medium to execute your ideas and stay disciplined.
Here is a link to a fellow trader’s msg from Streaks telegram group Telegram: Contact @streak_india
Which shows what it takes to become profitable in market, and how Streak helps in that.
Its not like making maggie 2min and you are profitable, you have to learn, study and put in the hours and then you will be unstoppable. Streak folks are just trying to impart plain factual information without any color/bias or gimmicks and we should understand that, they are not here to sell you a strategy, you have to build your own, you build it you reap the rewards. Without learning these factual information/fundamentals(true maths and concepts) involved in practically building a viable strategy and understanding how they interact with markets, you will not get to a level to be confident about your own strategy or idea. This is why I soak up every single blog/webinar they put out there, even though it is plain vanilla but it most scientifically valid, well-researched and put-together content I have come across.
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There is a specific reason I asked the query.
The traders who are profitable on manual setups will have higher chances of being profitable via streak. So the people who adopt this system should be from the small subset of 11%.
Ideally most of the streak users should be profitable then, brokerage should not stand in the way.
The traders who are already making losses - will it make any difference if they use the streak platform. Has this platform helped any losing trader to become profitable?
