I was also wondering if the following chart's data remains the same if I risk 20% or 50% of capital per trade?
I noticed the data is under the heading - risk of ruin - so I think that explains it
Also - why does it stop at 65% accuracy - must be for the commercial world ;-)
Do the math. At 10% risk, a couple losses in a row very quickly deplete your account. Your winners will have to work double time to catch up.
Try 0.5-3% risk instead. Less profits, but you'll live longer.
A couple would be 20% technically. Also, a 75% trader isn't going to lose 10 in a row.
He absolutely can lose 10 in a row. I don't care if his win % is 99. If and when it does happen, he may find himself over-leveraged for the situation and he will blow up.
What you want to do is completely avoid the blow-up scenario. Limit your risk and the money will come if you have an edge.
Sorry to disappoint you - but a 75% trader can lose 10 in a row - he can lose even more - but similar he could win 35 in a row
I have been lucky last 5 years - as never lost more than 7 in a row - and my average scalping win ratios based on thousands of live trades - per 100 - ranges from a low of 62% to high around 87%.
So normally I expect 70 - 80% win ratio and then I use a method that if I lose 3 trades in a row in a session - I stop for an hour or more - and then break the sequence by making sure during the next 3 trades I pull one with any profit over 1 pip.
Black swan events can ruin accounts - although they might only happen now and again - sometimes a few times a year - they can cause havoc
Remember nothing is certain in trading
The more experienced and skilled in trading - the more likely you will have a way to break sequences - and not allow them to ruin your psych.
i work on very tight stops - so expect losses - every day but I can never say I will never have over 7 losses in a row because I have not had them in last 12000+ live trades.
Expect the unexpected - and as Vielgeld mentioned for retail stay under 3%
Ok if its just $100 account and you are not bothered losing it - yes take more risk - but at least under 3% stake size you can ride any runs of say 10 or 20 bad trades out of say 25 trades.
Also if you have a great run with over 30 consecutive winners due to a small change to your technique - dont think you have found the holy grail ;-)
Some top scalpers can go over 50 - 90+ winners in a row - but similar in a bad 4 hrs session when they lose focus - concentration etc that can turn to 10 - 20 losses.
You are only as good as your mind allows you to be ;-)
Hope that helps anyone saving a new account
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