If someone tells me they're using x% in their mmgt, then I assume they're saying "my risk per trade is x%". Any other connotation such as I use 5% of my portfolio per-trade for margin has no value in short term trading. I assume you're saying you risk 5% per-trade of your portfolio. 5% of portfolio would have a realized loss of 5k on a 100k account. The 10k gain comes from your statement that wins are 2x losses. If not, what is the value of the statement and what is your risk per-trade?
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Could really use some advice please
- Thread starter Ansare
- Start date
If someone tells me they're using x% in their mmgt, then I assume they're saying "my risk per trade is x%". Any other connotation such as I use 5% of my portfolio per-trade for margin has no value in short term trading. I assume you're saying you risk 5% per-trade of your portfolio. 5% of portfolio would have a realized loss of 5k on a 100k account. The 10k gain comes from your statement that wins are 2x losses. If not, what is the value of the statement and what is your risk per-trade?
Quote from acrary:
If someone tells me they're using x% in their mmgt, then I assume they're saying "my risk per trade is x%". Any other connotation such as I use 5% of my portfolio per-trade for margin has no value in short term trading. I assume you're saying you risk 5% per-trade of your portfolio. 5% of portfolio would have a realized loss of 5k on a 100k account. The 10k gain comes from your statement that wins are 2x losses. If not, what is the value of the statement and what is your risk per-trade?
Got it. Appreciate your explaining further. That does, of course, make perfect sense.
My risk per trade--meaning what I am willing to lose before getting out of a position--is 5.5% of that 5% of portfolio per trade. If I have two max losses in one day (hasn't happened yet) then I'm done for that day.
Quote from Ansare:
"Could really use some advice please"
...I have daily/weekly/monthly goals, and--like all of you--just HATE giving back profits. If I hit my goal by 11 am, like I did today, I stop trading. If I hit my weekly goal, like I did today, I stop for the week. If I hit my monthly goal, like I did by February 24th, I stop. While it is great locking in profits, it's not so great to be (I would hope, anyway) leaving some very nice money on the table--and it's eating me up.
I also know--from first hand experience of course--that if I continue trading past my goal and end giving back even a small amount, then THAT eats me up...
You're looking at this in the wrong way via a perfectionist mentaility.
Instead, you must instill the fact that you've reached your profit goal and that implies you have not left any money on the table.
Thus, your view of leaving money on the table is incorrect.
Here's an example of leaving money on the table...
* You're in a trade and exit the trade prior to your profit target being reached and then you see price continues to that profit target or further without you.
I'm sure there are many times where the market turned around and retraced soon after your exit at a profit target.
A solution is if it really bugs you is to increase your position size and use those extra contracts to get greedy.
However, if you start noticing it's causing trade problems when you try to catch something more that's beyond your original profit target...
That's when you'll know to stick to your profit goals instead of letting greed sabotage your trading plan.
Mark
Quote from NihabaAshi:
You're looking at this in the wrong way via a perfectionist mentaility.
Instead, you must instill the fact that you've reached your profit goal and that implies you have not left any money on the table.
Thus, your view of leaving money on the table is incorrect.
Here's an example of leaving money on the table...
* You're in a trade and exit the trade prior to your profit target being reached and then you see price continues to that profit target or further without you.
I'm sure there are many times where the market turned around and retraced soon after your exit at a profit target.
A solution is if it really bugs you is to increase your position size and use those extra contracts to get greedy.
However, if you start noticing it's causing trade problems when you try to catch something more that's beyond your original profit target...
That's when you'll know to stick to your profit goals instead of letting greed sabotage your trading plan.
Mark
Mark -- Reading your reply immediately elicited the "ah-ha!" experience.
Maybe that line of thought should have occurred to me, but it never did.
Sincere thanks for bringing it to my attention. This is exactly the sort of thing I would expect to find in Trading in the Zone as I get further into it.