account size re ftse, stops

[Shadowman540]

Hi everyone,
New here so apologies for any D A questions, but this is giving me some trouble working out.
How does one trade ftse for example with the "recognised", stop placements re money management of say 2% max loss over longer periods/ charts.
Eg say I look at day charts over a year and trade a basic ma strategy, I have an account of 50k, (I don't), my maximum acceptable loss on this account would be 1k.
Now if iam looking at longer term trading that would require me to have a stop set somewhere around 200 pts away, to get rid of recent lows/highs/spikes, that requires my stake to be £5, if I managed to get 1000 point in the year id make 5k.
Are these the sort of stake sizes that people are using on accounts this size, are the time frames too long for the instrument / size of account or am I just getting the whole thing **** about face.

Any advise much appreciated

 

[malaguti]

Hi everyone,
New here so apologies for any D A questions, but this is giving me some trouble working out.
How does one trade ftse for example with the "recognised", stop placements re money management of say 2% max loss over longer periods/ charts.
Eg say I look at day charts over a year and trade a basic ma strategy, I have an account of 50k, (I don't), my maximum acceptable loss on this account would be 1k.
Now if iam looking at longer term trading that would require me to have a stop set somewhere around 200 pts away, to get rid of recent lows/highs/spikes, that requires my stake to be £5, if I managed to get 1000 point in the year id make 5k.
Are these the sort of stake sizes that people are using on accounts this size, are the time frames too long for the instrument / size of account or am I just getting the whole thing **** about face.

Any advise much appreciated

ello mate, I wouldnt say its **** about faced, and you probably know this already but just for clarification.
Your 200 point stop should be based on something sound eg resistance, or a swing low for example, or a trend line. whatever you based your initial decision on (please dont say its the subsequent cross of your MA)
That should determine your stop loss rather than an arbitrary 2% away
So now, your stop loss might be 200, it might be 500 wherever your stop really is based on the technicals
1% (better than 2% imo) of 50k is of course 500 points, which makes your stake at just £1 if the stop is 500, or £5 if your stop was 100 points away
You are looking at a daily chart you say, and its quite easy to have a stop 2-300 points away.

 

[Shadowman540]

ello mate, I wouldnt say its **** about faced, and you probably know this already but just for clarification.
Your 200 point stop should be based on something sound eg resistance, or a swing low for example, or a trend line. whatever you based your initial decision on (please dont say its the subsequent cross of your MA)
That should determine your stop loss rather than an arbitrary 2% away
So now, your stop loss might be 200, it might be 500 wherever your stop really is based on the technicals
1% (better than 2% imo) of 50k is of course 500 points, which makes your stake at just £1 if the stop is 500, or £5 if your stop was 100 points away
You are looking at a daily chart you say, and its quite easy to have a stop 2-300 points away.

Hi mate!,
thanks for that, bit of a wood for the trees moment there, ive had a few!!!.
is there a preferred time frame perhaps for longer trading on ftse?, and ill take the 1% max loss figure as well thanks.

 

[malaguti]

Hi mate!,
thanks for that, bit of a wood for the trees moment there, ive had a few!!!.
is there a preferred time frame perhaps for longer trading on ftse?, and ill take the 1% max loss figure as well thanks.

preferred no, its all down to the individual. Depends how long you may want to be in a trade, how often you might want to trade etc etc
personally, trading the FTSE I'm intraday and leave equities for longer term and they would be off the equivalent of weekly charts. My entry for FTSE will be off an intraday timeframe, say 4 hourly and will be in the trade between a few days to a couple of weeks