how much money should I lose?

[donald55]

its true , if you loss consistently of course there is something wrong , when making a loss we the traders should learn from the mistake that was happened , and should determined not to do the same mistake again.

Absoutely! No fun in making the same mistakes again and again. Better stop,review and correct them in future.

 

[Kevin FD]

Taking into risk management can be very useful to reduce the losses.

risk management is really important , in spite of having most powerful analyzing trade knowledge there is no chance to bring profit with consistently if you dont know how to manage money.

 

[wmram]

Rather than spending time on questions about how much you should lose, focus your attention on the traders' equation: are the chances for success times the reward noticeably greater than the chances for failure times the risk.
Don't take another trade until you can answer that question about that trade.

 

[wmram]

I believe that ones' ability to answer that question will tell you something about whether you have a chance at succeeding as a trader or whether you are a fool playing a fools' game.

 

[KISvalue]

You can lose whatever , you'll be safe but, never lose money kept aside for buying your wife something which you've promised her .

 

[Kevin FD]

Rather than spending time on questions about how much you should lose, focus your attention on the traders' equation: are the chances for success times the reward noticeably greater than the chances for failure times the risk.
Don't take another trade until you can answer that question about that trade.

yes agree with you , its a good reply with nice information , thanks again for your nice reply.

 

[WalletInvestor]

If this is a serious question, then I have some serious advice to offer you: don't become a trader - it's not for you. Do something else. Anything, anything at all, just don't waste more time or any money on trading.

Though more pessimistic than need be, I think this OP's attitude is still waay better than the more typical attitude of people going into trading with hopes of being successful rightaway.

 

[AronJohnstone]

As a beginner in trading should i trade with an higher leverage since I'm in demo, even though i know the fact that demo and live are different ?

Just for the experience is it a good idea to trade with higher leverage or trading with an average leverage gives the same experience on risk factors and strategical thinking ?

 

[hatemypips]

As a beginner in trading should i trade with an higher leverage since I'm in demo, even though i know the fact that demo and live are different ?

Just for the experience is it a good idea to trade with higher leverage or trading with an average leverage gives the same experience on risk factors and strategical thinking ?

Using more leverage you increase magnitude of impact of price movements on your equity. Hence you increase are potentially increase variance of your returns. Hence you potentially decrease your Sharpe ratio - get suboptimal performance.

 

[Rukumina]

I plan to start trading real money instead of a demo account and have accepted the fact that I will lose it all. What is a good amount to deposit considering the fact that I will definitely lose it all?

Always you will need Risk@Money Management. Fund your account always with money you can effort to lose.

 

[Kevin FD]

by the way , what you think there is any difference between money and risk management ? its all same or any major difference between two ?

 

[Rukumina]

Always you will need Risk@Money Management. Fund your account always with money you can effort to lose.

Risk is how much money you willing to lose at any given time. Let's say you have a £1000 account and you want to risk £10
that means you risk 1% of your account.
Money management, on the other hand, is how much you want to get in the return of your risk
Let's say you risk £10 and you want in return £20 that means you have a ratio 1 to 2

 

[trendie]

Surely, the question is about what you need to prove to yourself you are cut out for trading, and whether your methodology is viable.

If you need to take 100 trades to prove your method as viable, then that is your metric.
If only 50, then that is.
If you can trade for appropriate number of trades, and get some return, and also, if you can stick to your rules for that period, then you're good to properly fund an account.

If your set of trades doesnt give a good return, or you cant stick to your rules, then you can decide how much 50 or 100 trades are worth to you, in terms of initial test capital to lose.
If all you have is £100, then its £1 a trade, or £2 a trade if 50 trades gives you some proof of concept and proof of your ability to stay the course.

Get over those hurdles, then you can decide to properly fund yourself.
Instead of "losing money", think of it as R&D investment.

 

[mic.miller]

I am not a trader, but I don't think I would ever do that. It's not for me, and it's too risky... I prefer to buy and resell stuff. I am working in this sphere for like five years and I have some experience in selling. At first, I had a lot of money looses, but from the other side it is a forced necessity to have even more income from the future sales. So yeah, at first it is hard, but don't give up, and you will be satisfied by the results of your efforts. Usually, I have to choose offerup vs letgo, because I work with both of these apps. Anyway, I wish you luck with trading.

 

[crud-cutter]

Risk :Reward ratio is total b*s*

This is because no sensible trader would use both a fixed SL and a fixed exit TP.
Take the case where price is trending nicely towards your target and gets halfway there before it turns around - would you really just sit there and allow the trade both to go from a 1:1 profit to a small loss and then to a full loss stop out without doing anything?
Think about it this way: If you entered at a good price then lots of other traders will also have entered there. So when price turns against you, it will probably be propelled by traders snatching their profits (if your trade was a buy then profit taking is a Sell). Then once it gets below your entry then there will be other traders stop losses being triggered which again will help to propel price southwards. Other traders will see that this time nobody bought at your entry price and will think the trend has changes and so start selling.
And all the while you will sit there until you are so desperate that you think it doesn't make much difference if you exit now or let it go to the full Stop Loss. The there is a good chance, because most traders put their Stop Losses in the same place (where they have been taught, that price turn again soon after taking out your Stop Loss.

Do you really want to trade like that?

A sensible trader manages their trades - they use whatever system/method to try to read the market and when in profit and the market turns against them they will take steps to avoid a loss For example moving their SL into a Stop-in-profit position, or in the case of a multi-lot trade taking a partial exit and adjusting the SL on the remainder to cover all commissions etc.

 

[MacroBeat]

I plan to start trading real money instead of a demo account and have accepted the fact that I will lose it all. What is a good amount to deposit considering the fact that I will definitely lose it all?

Well Trading isnt a Casino... so it is a very odd question to ask how much money you should put in with the view you lose it all anyway, if that is your view, i would tell you go and do something else and buy yourself something nice... you have to start trading with the view to learn and get better and look after your money. With your current view hard to make it as a trader but happy to answer more of your questions

 

[Vladimir Rojas]

I think everyone should reply this question too: How long should I study to operate well?
This question could reply the first question...
And in my opinion, I think there's no definite time to say that you operate well. In fact you will always have bad operations even if you have studied for more than 10 years and even have a university degree in Finance or related branch, since having a success of 50% already makes you a good trader. What is important is to have certified educational materials where you can acquire the appropriate information so that the beginner trader can start his trading practice on the right foot. My advice; Read everything that comes to you and always contrast.

 

[HeavLeighGill]

Probably isn’t good that you’re already suspecting you’ll lose your entire deposit. It’s true that many traders do lose in the beginning, but that doesn’t mean you should just expect to lose everything. In my opinion it sounds like maybe more time in demo perfecting your strategy could be helpful to boost your confidence.

 

[hazelj80]

Think of it as an experience.
If you think you will lose it in a day invest as much as you would spend on a good night out.
If you think you will lose it in a week invest as much as you would spend on a weeks holiday.
If you think you will lose it in one year invest as much as you would spend on a gap year round the world tour.
If you think you would lose it all in 3 years invest as much as you would on a degree course.

Now the question becomes not 'how much should you lose' but 'how much you are willing to pay for your experience'.

This is probably the most accurate statement. If for example you're a day trader, meaning not holding positions overnight, just set a daily loss limit. dont keep trading past that daily loss limit the market is just not it that day and you're swinging and missing.

or else you'll find out you've lost way more than you wanted in a week. and its hard to get back. ask me how i know this...

 

[DT5]

Whatever you can afford to lose. Some brokers let you deposit as little as $10 so I'd start there