Clueless money & risk management

[the hare]

Shakone has quite rightly pointed out that I'm needlessly complicating this, no chart is required !

I just thought it would help Joe feel like a proper trader

 

[BeginnerJoe]

Open a demo account so this isn't going to cost you anything, 10k balance will be enough. Open up a GBPUSD chart. Then toss a coin, buy if heads, sell if tails. I suggest trading maximum of one micro lot. Don't set a stop, or a target.

Post your entry price etc for prosperity at the zoo.

Then close the platform, and forget all about the trade, and we'll do the next bit tommorow.

Good to have your neck out for once. Pound coin says tails. So, sold 1 real nano-unit at 1.51178, no target, no stop, 14:17pm.

 

[BeginnerJoe]

Good to have your neck out for once. Pound coin says tails. So, sold 1 real nano-unit at 1.51178, no target, no stop, 14:17pm.

Closed +12. It's not so much coin tossing worked, rather the ranging market would have put any entry method into profit briefly if you wait long enough. I'd give no points for the coin tossing method. But I would give some points for the hare apparently estimating correctly the type of market that increases the chance of coin tossing working. I presume the aim is to enter on contracting volatility and wait for the expanding volatility to bring the entry into profit, even if only briefly.

 

[robster970]

Closed +12. It's not so much coin tossing worked, rather the ranging market would have put any entry method into profit briefly if you wait long enough. I'd give no points for the coin tossing method. But I would give some points for the hare apparently estimating correctly the type of market that increases the chance of coin tossing working. I presume the aim is to enter on contracting volatility and wait for the expanding volatility to bring the entry into profit, even if only briefly.

I don't think you were supposed to close it Joe........

 

[counter_violent]

I don't think you were supposed to close it Joe........

It's clear he has already worked out the strat and has now set about improving it.

 

[BeginnerJoe]

I don't think you were supposed to close it Joe........

It's not like I can't open another. I have opened 2 nano-units of long based on a counter coin-tossing-method method. Long 2 x 1.51041, no target/stop, 04:43am.

 

[the hare]

A brilliant example of how people can't follow the simplest of instructions !

He didn't do anything wrong exactly, as long as he remains consistent, but he's forfeited the right for further assistance under the ability merit and conduct clause ha ha ha ha

 

[15 min tlb]

A brilliant example of how people can't follow the simplest of instructions !

He didn't do anything wrong exactly, as long as he remains consistent, but he's forfeited the right for further assistance under the ability merit and conduct clause ha ha ha ha

If he remains a consistent winner , it is good as long as he sticks to 0.25 % per trade risk .

 

[D70]

Most advice given in books seminars and trading education by gurus is

Risk 2 % per trade , it works well in winning streaks.

If a trader gets 15 losses in a drawdown , he would lose 30 % of his account .So this advice is given by clue less gurus.

In order to get 5 % drawdown from 16 losses , a trader should risk no more than 0.33 % per trade .

Most of you are buying books written by failed traders. , money management is the area of poor advice.

It wouldnt be 30% would it........ think about it.
[Hare already done]

 

[15 min tlb]

Hare spotted it also. Continue.

regurgitating the same thing.

 

[BeginnerJoe]

A brilliant example of how people can't follow the simplest of instructions !

He didn't do anything wrong exactly, as long as he remains consistent, but he's forfeited the right for further assistance under the ability merit and conduct clause ha ha ha ha

Your help would not have beaten the performance of my approach. I added 4 more opportunistic units. Now the trade is running with a stop to guarantee +20 pips while subjecting to additional guaranteed pips as we progress. This trade demonstrates there is something better than coin tossing.

 

[BeginnerJoe]

Out +20. I think that concludes the coin tossing lesson.

 

[BobbyBB]

The OP is right, those who say 'risk 1%-2% a trade' are clueless.

Personally though I think under 0.25% is better, somewhere in the 10-20 range.

Folks, I don't care how good you are, or think you are, but a run of 10+ consecutive losses is coming your way. Prepare for it, or pay the consequences when it happens....

The hidden point, where so many get it wrong about risking such small amounts is that it helps to a) keep trading effortless as in losses don't matter so much as they're tiny, and b) when that run of losses does come up, you'll lose an acceptable amount so your mind will be free to continue taking the signals. But if you've just lost 5-10% in a day (or few) then I can guarantee that for 95% their mind will start to effect their trading and when that happens it's odds on that a) more losses are coming your way, or b) you're scared about trading and fail to take signals which turn out to be very profitable so messing your mind up even more....

 

[ffsear]

If you blow your account on a strict 2% risk, then the issue lies elsewhere and not with your risk management. Dropping to .25% wont make you profitable, unless your trading style is that where your looking for that 1 big 20:1 winner.

Death by 1000 cuts.

Risk is what keeps me sharp!

 

[15 min tlb]

I don't think you were supposed to close it Joe........

Joe knows sound money management coin tossing probabilities in real life , this compare to all the gurus risking 10 to 50 % of their accounts on a strategy.Good traits don't dissapear.

 

[Trader333]

When I was day-trading my risk percentage was 0.2 of 1% but then my position size was completely dependent on instrument volatility.

 

[15 min tlb]

When I was day-trading my risk percentage was 0.2 of 1% but then my position size was completely dependent on instrument volatility.

I don't believe in volatility based risk because rewards and risks are proportionally adjusted , volatility based position sizes do work for some , but it is not the perfect solution.

Let us for example say I am trading oil with 3% daily volatility and eur /usd with 1 % , I would expect higher rewards from oil in pips , but a 100 stop and 50 target can work as well depending on the method.

 

[the hare]

When I was day-trading my risk percentage was 0.2 of 1% but then my position size was completely dependent on instrument volatility.

I think one of my multi nics has made this point before. Some methods don't work particularly well in conditions of low volatility, in which case, you end up with the largest positions under circumstances in which your edge may not perform well

It's something that might need to be considered, or not depending on individual circumstances, but I thought I'd throw it out there as this is a semi serious kinda thread

 

[BeginnerJoe]

I have gone back in playing cable. I remained biased. So no coin tossing. Averaged in long 10 x 1.50914. As far as I am concerned, the market conditions hasn't changed for this.

 

[BeginnerJoe]

I have gone back in playing cable. I remained biased. So no coin tossing. Averaged in long 10 x 1.50914. As far as I am concerned, the market conditions hasn't changed for this.

No great shakes for me today. Closed for +20.

There is more pips in it. But now I value discipline over hope+risk. My rule dictates I be out, so I am. The missed pips doesn't move or pain me. I have attained a new level.