One of the most useful concepts I took away from Al Brooks video course was the idea of “Don’t care money”.
He used the idea to illustrate a way of learning to trade properly using very small position sizes.
For example, when getting on board a bull trend, he generally recommends having a stop at the base of the trend initially. This can be a long way from the current price, and can be scarey for beginners if you are using reasonably large (for you) position sizes.
However, if you enter a tiny position, you have more chance of managing the position correctly, as the amount at risk is small enough for you to not care if your stop gets hit.
I am quite mean with trading, so my “don’t care money” size is indeed very small. MT4 allows me to trade at £0.10 per point on the SPX for example.
You will obviously never get rich betting like this, but more to the point, you will never get poor either. Brooks is quite correct in that following the rules properly is much easier if you are not seriously worried about the amount of money you are risking.
I prefer using very small amounts of real money to using a demo account because there is just enough riding on it that I want to get it right, and don’t cheat myself by thinking “Oh it’s just a demo; I would never have lost like that in a real account”. At the end of the day, you may still lose a little money, which is chastening enough to make you want to get it right next time.
He used the idea to illustrate a way of learning to trade properly using very small position sizes.
For example, when getting on board a bull trend, he generally recommends having a stop at the base of the trend initially. This can be a long way from the current price, and can be scarey for beginners if you are using reasonably large (for you) position sizes.
However, if you enter a tiny position, you have more chance of managing the position correctly, as the amount at risk is small enough for you to not care if your stop gets hit.
I am quite mean with trading, so my “don’t care money” size is indeed very small. MT4 allows me to trade at £0.10 per point on the SPX for example.
You will obviously never get rich betting like this, but more to the point, you will never get poor either. Brooks is quite correct in that following the rules properly is much easier if you are not seriously worried about the amount of money you are risking.
I prefer using very small amounts of real money to using a demo account because there is just enough riding on it that I want to get it right, and don’t cheat myself by thinking “Oh it’s just a demo; I would never have lost like that in a real account”. At the end of the day, you may still lose a little money, which is chastening enough to make you want to get it right next time.
