Back to the Basics

[-ooO-(GoldTrade]

Brandonf >I think the most commonly touted "Maximum Risk" is 2%,I'm not generally comfortable risking this much on one trade. The wise ones who came before all of us seem to have established 2% as the max. Tolerance on a trade <

If someone is just starting out how are they going to make any money on 2% of nothing?

What do you think, everybody inherits the funds we trade with?

Maybe someday you will meet some traders that made there capital in the markets and you will see how ridiculous what you say sounds.

 

[Brandonf]

Quote from -ooO-(GoldTrade:

If someone is just starting out how are they going to make any money on 2% of nothing?

What do you think, everybody inherits the funds we trade with?

Maybe someday you will meet some traders that made there capital in the markets and you will see how ridiculous what you say sounds

Good luck with that And no, I don't expect that most people will inherit the funds to trade with, I certainly did not. But, a lack of funds is not a reason to prey for a run of 7's.

Brandon

 

[DHOHHI]

Quote from Brandonf:

Maybe it should not be such a surprise given that the bull is back and all (This according to Barrons, Cavuto, Joe Battataglia and all those others people and groups that have performed so well over these last few years)

I'm not sure the bull is back! Has Battataglia ever been bearish? Fear and greed drive the markets. Nice move off the Oct. bottoms but I don't think we're out of the woods yet. In any event there do seem to be more new traders lurking and jumping in the water.

 

[DHOHHI]

Quote from lescor:

But I realize that if youve got a one trick pony and your horse dies, then you're in trouble. The markets go through cycles, and so do certain trading methods. I think that you should always have ideas in development and never give up on learning new things.

After trading since 1996 I've found that for me to do okay I need to be adaptable and alter my trading methods as the markets dictate. I try to "listen" to what the market is telling me and trade accordingly. The past couple years scalping has been my best money maker, something I'd not have pursued 6-7 years ago.

 

[DHOHHI]

Quote from GreenDog:

Hello, my name is Brandon and I run a website called Trading from Main Street. I'm unable to make a living via trading -- but I'd like to teach the principles of trading anyway

Are you certain he's unable to make a living via trading?

Personally, I don't care one way or the other. I've been a member of SI since 1996 and only recently started posting here on ET and Brandon has posted some good stuff both on SI and here. Seems like when someone has a service to market that they're guilty of whatever just by posting. If you don't want to read posts from certain peple then why not use the Ignore feature? Seems simple enough ...

 

[dbphoenix]

If greendog believes that what BF says has no value, perhaps he'd be willing to impart his own wisdom.

 

[DHOHHI]

Quote from -ooO-(GoldTrade:

If someone is just starting out how are they going to make any money on 2% of nothing?

What do you think, everybody inherits the funds we trade with?

If someone is undercapitalized then they probably shouldn't be trading actively. Rather, they should work at saving up enough capital to fund an account so that it's more than "nothing". Next, putting on successful trades is as much a part of the learning (i.e. confidence building) process as making "x" dollars.

To your latter question ... I didn't inherit the funds I trade with. I worked to save money to have adequate capital to trade with. If you want something bad enough you work at it. To make a statement about inheriting funds seems a bit off the wall.

 

[lindq]

Quote from Brandonf:

I'd like to start a thread going over the very basic aspects of trading.
Brandon

Brandon, I think this is good, solid information for new traders. However, I feel that you have left out an important subject that is always at the top of the list for new traders, and that is time-frame.

From my own experience in the past, and from talking with others who have survived and prospered, my personal opinion is that it is a huge mistake for new traders to put so much emphasis on "day trading", where the odds are so strongly against success. I was interested to note this weekend in reading Elder's "Come into my trading room" that he also shares the opinion. Even studies done of trading rooms at the end of the last bull run showed clearly that those who took a longer term approach...position or swing trader...fared far better than the average daytrader or scalper. While I have no doubt that there are daytraders who are making good returns, it makes little sense to me for a new trader to jump into an environment where the learning and frustration curve is so much harder to overcome.

So again, I think this is a subject that needs to be addressed for any new traders.

 

[dbphoenix]

Quote from -ooO-(GoldTrade:

If someone is just starting out how are they going to make any money on 2% of nothing?

Interesting remark. If you have nothing in your account, you're not going to be trading anyway. Or have brokers started taking credit cards?

 

[DHOHHI]

Quote from dbphoenix:



Interesting remark. If you have nothing in your account, you're not going to be trading anyway. Or have brokers started taking credit cards?

LOL. Might be like some mortgage companies I've heard of who finance MORE than 100% of the home sale price.