Beginners should risk only 0.25 % per trade

Apr 3, 2017
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#16
If ~65% (the actual drawdown for your scenario) was even remotely close to 80%, I would be a millionaire by now. I agree with the intent of your post, but really even the 0.5% is completely arbitrary and not useful in my opinion. The amount you risk should in my opinion depend on factors including:

- How confident you are in your system --> should be based on backtesting and subsequent preliminary live testing.

- How much the market can accept without destroying the intent of your system. --> It is useless to size your position for an arbitrary risk value if your initial live results suggest that a certain size position reduces the strategy effectiveness. This is quite difficult to assess, but the very act of putting yourself into the market alters your strategy slightly. The point is to size your position to make this alteration insignificant. For example, it probably doesn't make sense to try and push a 1500 limit order through when the bid and ask volume is at 100 each.

- The frequency you make trades. If you make 20 trades a day, risking even 0.5% each trade may be foolish as that essentially puts ~9.5% of your account at risk each day.

- The size of your account and how much of it you can lose without impacting you. I typically only risk 0.25% or less per trade on untested systems. Really the size is determined from the expected drawdown of the system from backtests and the percent of my account I am ok with risking on the expected drawdown. So different systems may have different values.

As you can see, in my opinion there is no one magic number.
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Would you agree. , that the 2 Percent is quite high , considering experienced traders make mistakes?95 percent lose in this game ,2. Percent is part of the problem.
 
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#18
“[Michael Marcus – another top trader] taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgement, being wrong, making your next best judgement, being wrong, making your third best judgement, and then doubling your money.” – Bruce Kovner

 
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#20
Van Tharp didn't trade. This thread is blind leading the blind.
Van Tharp video is professional level talk , he actually talks sense and practical reality of real trading .You don't get these pro level discussions on forums , since there are no professionals with this no knowledge.If they are blind to reality , how can they discuss reality?
 
Apr 4, 2016
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#21
Van Tharp video is professional level talk , he actually talks sense and practical reality of real trading .You don't get these pro level discussions on forums , since there are no professionals with this no knowledge.If they are blind to reality , how can they discuss reality?
Any one can talk, doesn't mean they can trade. There's no evidence of him capable of making money in the market. Anyone following him will have the same result: no profit.
 
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#22
Any one can talk, doesn't mean they can trade. There's no evidence of him capable of making money in the market. Anyone following him will have the same result: no profit.
I agree with your statement , but if you have winning personality , you will take good information from this video.Listening to you would be "listening to the blind".
 
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#24
He has winning personality but doesn't have winning capability. There's no profit in what he says.
All these guys peddling systems and methods to noobs , don't tell the noobs , purposely hide psychology and mistakes from traders .There is profit , if they accept and learn to avoid the mistakes he talks about.
 
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#25
All these guys peddling systems and methods to noobs , don't tell the noobs , purposely hide psychology and mistakes from traders .There is profit , if they accept and learn to avoid the mistakes he talks about.
He couldn't show a profit himself, never mind helping other people.
 
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#28
Yes, like you.

Curious, if you like Van Tharp that much, why haven't you learn a single thing from him ? Why do you continue to suffer psychology related problems ?
He ,like others can sell psychology , and mentoring , but you need to learn from winners .Example :Footballer Lukaku is mentored by great footballers who succeeded in playing , players like Thierry Henry.He does not get mentored by failed footballers!
 
Apr 4, 2016
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#29
He ,like others can sell psychology , and mentoring , but you need to learn from winners .Example :Footballer Lukaku is mentored by great footballers who succeeded in playing , players like Thierry Henry.He does not get mentored by failed footballers!
Yes great traders should get mentored by greater traders. They should not be mentored by Van Tharp, he could not trade. He's not even a beginner trader.