Grey1
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Grey1
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china white
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exceptional site from Uni Linz, Grey1! i think any newbie shud have to sign he read and understood it b4 placing his 1st trade 
china white
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ok - my humble opinion on that Uni Linz page:
exceptionally good. I completely agree that EVEN IF u toss the coin entering the trade but manage yr trades properly u will be making money.
where I disagree tho - i do not think that any set of indicators is like tossing the coin. it is all about odds innit? I'd say 1) good set of indicators skews the odds in yr favour, as much as 75/25; 2) psychologically it adds to trader's confidence which is the main thing. U cant trade if u r not confident u r the best
exceptionally good. I completely agree that EVEN IF u toss the coin entering the trade but manage yr trades properly u will be making money.
where I disagree tho - i do not think that any set of indicators is like tossing the coin. it is all about odds innit?
I'd say 1) good set of indicators skews the odds in yr favour, as much as 75/25; 2) psychologically it adds to trader's confidence which is the main thing. U cant trade if u r not confident u r the best TheBramble
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Margin - Consideration in Position Sizing
As a Pattern Day Trader (soon - not just yet) I'm aware of the minimum balance and other rules etc., but only just realised I get X4 margin.
So, for arguments sake, say I have $50K deposited in my broker account and I use a 1% risk size.
Do I calculate my risk size on my cash holding ($500) or on my overall margin amount ($2000)?
My preference (more risk averse than not) is to only trade cash.
But more importantly - how do you guys handle this?
As a Pattern Day Trader (soon - not just yet) I'm aware of the minimum balance and other rules etc., but only just realised I get X4 margin.
So, for arguments sake, say I have $50K deposited in my broker account and I use a 1% risk size.
Do I calculate my risk size on my cash holding ($500) or on my overall margin amount ($2000)?
My preference (more risk averse than not) is to only trade cash.
But more importantly - how do you guys handle this?
Bramble,
On your cash holding, otherwise your risk becomes 4X what you want.
Think of it in these terms, if your cash = $50,000 then taking full advantage of margin your maximum trade size = $200,000. If you stake $200,000 and the stock falls (or rises if short)1% you are down $2,000 rather than the $500 you wanted - oops!
LII
On your cash holding, otherwise your risk becomes 4X what you want.
Think of it in these terms, if your cash = $50,000 then taking full advantage of margin your maximum trade size = $200,000. If you stake $200,000 and the stock falls (or rises if short)1% you are down $2,000 rather than the $500 you wanted - oops!
LII
Tony - I agree with you. I trade my cash balance.
In your example of risking 1%, you would in fact be risking 4% of cash if you used your margin balance on which to base the 1% on.
If you risked 5% of your margin balance, you would be risking 20% of your cash balance (yikes!).
In your example of risking 1%, you would in fact be risking 4% of cash if you used your margin balance on which to base the 1% on.
If you risked 5% of your margin balance, you would be risking 20% of your cash balance (yikes!).
Bramble,
On your cash holding, otherwise your risk becomes 4X what you want.
Think of it in these terms, if your cash = $50,000 then taking full advantage of margin your maximum trade size = $200,000. If you stake $200,000 and loose 1% tou are down $2,000 rather than the $500 you wanted - oops!
LII
On your cash holding, otherwise your risk becomes 4X what you want.
Think of it in these terms, if your cash = $50,000 then taking full advantage of margin your maximum trade size = $200,000. If you stake $200,000 and loose 1% tou are down $2,000 rather than the $500 you wanted - oops!
LII
Rognvald
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Does anyone have a copy of the maney management article on
http://keplerweb.oeh.uni-linz.ac.at/trading/moneyMan.htm
poste by Grey1 as the site has disappeared - if so pl email it to me
Thanks
http://keplerweb.oeh.uni-linz.ac.at/trading/moneyMan.htm
poste by Grey1 as the site has disappeared - if so pl email it to me
Thanks
china white
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bramble - its always cash mate. margin is not a tangible thing, in a way it is like an option - it is a RIGHT given 2 u by yr broker to exceed yr cash deposit by say 4 times. what matters is CASH P&L.
- it is a RIGHT given 2 u by yr broker to exceed yr cash deposit by say 4 times. what matters is CASH P&L.BlueChip Trader
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I hope you'll find the following article of some interest.
