brokers who allow under 1000$ deposits?

[Overnight]

I don't take sides in this discussion, because both Zzzz1 and Gotcha make valid points. I have to agree with Gotcha on this bit though...

...Now are you going to lose every trade? Surely not, but you can't really begin to draw any conclusions until you put on maybe 10 or 20 trades. If you risk $200 instead of $20, you're down 2-4k, and this can be very damaging...you would know that after a few failed trades, you start to adjust stops and targets, simply because of the money you might lose, or not wanting to lose what little you have.

Yep, this is very true. The whole adjusting stops and targets thing does come into play when the psychology of doing it for real starts to eat at your soul. Not many of us are robots and can plan the trade/trade the plan when we start losing. There's this wicked toll on the psyche that starts to creep in. It can get exhausting.

 

[Gotcha]

I don't take sides in this discussion, because both Zzzz1 and Gotcha make valid points. I have to agree with Gotcha on this bit though...



Yep, this is very true. The whole adjusting stops and targets thing does come into play when the psychology of doing it for real starts to eat at your soul. Not many of us are robots and can plan the trade/trade the plan when we start losing. There's this wicked toll on the psyche that starts to creep in. It can get exhausting.

Exactly. There is also a very good quote by Lescor, for those who are familiar with him or have read his posts, where he says the key is to start by risking an amount of money that you're not afraid to lose.

This is why I think its a joke for Zzz to say that risking $20 is trivial. It actually isn't when you consider that you have to be able to risk this much each and every time, and be never scared to put on the next trade. If you lose all 5 trades, you have to come in the next day as if nothing happened.

I can see how, from a swing trading perspective, Zzz thinks you have to risk more, because he is maybe only taking a few trades a month. Most people wouldn't think too much about maybe losing $100 a month, but for a day trader, losing $100 per day is perhaps the sweet spot of it being not too much that you're not depressed, but enough that makes you look for ways to lessen this, and at the same time, if you collect $100 from the market, its actually an amount of money that means something.

 

[Overnight]

...
I can see how, from a swing trading perspective, Zzz thinks you have to risk more, because he is maybe only taking a few trades a month. Most people wouldn't think too much about maybe losing $100 a month, but for a day trader, losing $100 per day is perhaps the sweet spot of it being not too much that you're not depressed, but enough that makes you look for ways to lessen this, and at the same time, if you collect $100 from the market, its actually an amount of money that means something.

There is something crazy, sick and mean about swing trading that I am trying to come to grips with.

It is when you enter a position, and you have your mind dead-set on that target, let's say $400. So you watch the position go to $100, then down to $50. Then jumps to $300, then down to $200. Then it hovers at the $200 profit area for 10 minutes. So you think..."Hmm. I really want that $400." Then the price gets to about $350 and you go, "Whoa, almost there...Just $50 more. Come on baby!"

And then the position starts going other way, and all of a sudden you see the position at $100, then $80, then $70, then $60 and you think, "uh oh." So you close out at $50 profit.

You sit there and think..."Man, why didn't I just close that position when I was up to $350? Why was I so hard-headed and greedy for $400? Now I have only $50." Coulda' shoulda' woulda'.

So then you watch as price rebounds again to your target and beyond. You yell "BASTARD!!!!"

But you still made $50. So why the yelling?

Conversely, if you stayed in and the position kept going against you, then at -$350 you say to yourself, "I could have had the +$350, I could have had +$50, but no, now I am sitting at -$350. So you close at -$350.

Then you see price rebound to the point where you are at BE.

You lost only $350. So why the yelling? Could have been worse.

It is a twisted thing to think that for all the opportunities we have to capture profits a bit of a time if we could scalp in swing positions, some of us (me) get so hard-headed into the very fact of a swing being what it is that we miss the trees for the forest.

The forest is the swing, the trees are the small bits we can scalp out of the forest.

Swingers should not be concerned with little bits like that, but I think many are. Daytraders MUST worry about those little bits, because that is the nature of the daytrade...Scalping the trees and not trying to cull the whole forest in one fell swoop.

So yes. Risking $20 is not trivial, when one is trying to achieve trivial amounts of profit on each trade. Losing a bunch of trivial amounts adds up at the end of the week and incurs a terrible toll on the mind.

 

[comagnum]

That's the nature of swing trading. In general the best swing traders expect only approx 10% of the trades to be the big winners for the year. The idea is with decent risk/trade mgmt the other 90% of winning & losing trades either contribute slightly to the bottom line or scratch each other out. To help offset the sporadic swing profits I take shorter time frame setups when there are no swing plays from the higher time frames - like false break outs/downs where price can go parabolic for a few days or more - the idea is to help the profit distribution be less sporadic.

 

[Zzzz1]

I still have not seen nor heard of anyone funding an account with 1000 dollars, doing whatever, and not bankrupting said account at some point. My hunch is that most who vehemently oppose the concept of a well funded account and proper risk management based on probabilities and relative returns to be the same people who repeatedly inject money into their losing trading accounts.

 

[Gotcha]

It is when you enter a position, and you have your mind dead-set on that target,

Totally agree with you. What I did was to take every trade I put on, and just run some simple what/if scenarios on it, really simple shit like does it hit -4 or +4 ticks first. (making sure that the +4 profit has price going through it, or at least so many touches that I can feel confident that I should have gotten the fill). I would keep a spreadsheet with all different scenarios, like -4 and -6 and -8 ticks, and then +4, +8, +12, +40 ticks. Obviously, only a few hit +40 (ie. 10 points). The thing though is that after the trade was entered, I'm not sure if I had a good predicting power about which would hit first, the stop or profit. Now mind you, some of these entries weren't even the best. They weren't according to what I wanted to do, but instead what I did.

What I saw though was that sometimes the trade just works, and sometimes it doesn't. What I also saw was that sometimes it went right down to my entry price, even dropped below my entry price, and then still hit the target before hitting the stop. If I moved my stop to BE too soon, it wouldn't be a win. If I got out for less than whatever profit I was tracking, it now meant that I wasn't getting the full win, but always taking the full loss.

In other words, it was stats that showed me how horrible my micro managing is to trades. Sure, some I would take a loss on of just 2 or 3 ticks, instead of the 8 ticks of where the stop actually was, so I feel good about the smaller loss. But so many times, the early exit prevents the profits. So if you track this enough, and you see the profits take care of themselves, you prove to yourself that it can happen if you just leave it alone.

Now I agree, getting to +350 and and closing the trade for a loss is stupid, and my stats clearly showed that once the trade started to work, after a certain number of ticks, then yes, it could be moved to breakeven, but this was when it got damn close to the target. With your numbers, the trade would have to hit at least about +300 before the stop gets moved to +0, and at that point, it either hits +400 or stops out for +0. If you have at least 50 trades to track lets say, and see what works best, it will almost tell you what you need to do without even thinking about it.

What I also saw was how there could be a string of 7 losers in a row. If a $200 stop is your stop, and this hurts you emotionally, then going through 7 of these will be destructive, but this is exactly why the $20 loss when starting is so critical. It has to be an amount of money you don't care about because what is most important is that you can take the next trade. When you skip the next trade, you skip the profit that completely makes the trading equation positive.