Ex-institutional currency trader advises newbies ...

Quote from intradaybill:

You can double up your position and retain the same risk percent by moving the stops. Many noobs do not understand how this is done. This paper has the formulas you can use for both point and percentage R:R to calculate stops for constant risk percent when you change position size:

http://www.priceactionlab.com/Literature/PositionSizing.pdf
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I understand. But in order for it to work, a growing trend would have to exhibit shorter pullbacks. Or, the trader must have extremely accurate entries.

Trade#1.........1 contract = 16 point stoploss
Trade#2.........2 contracts = 8 point stoploss
Trade#3.........4 contracts = 4 point stoploss
Trade#4.........8 contracts = 2 point stoploss
Trade#5.........16 contracts = 1 point stoploss
 
Doubling up is probably a bit of an exaggeration (or if he doubles he probably does it to a certain point then caps it off), but the principle is rock solid.

That is one of the main ingredients as to how I achieved my great gains (see the link in my sig). Pretty much any veteran trader or poker player will understand this concept. Press the advantage and go for the jugular when you are winning, not for any superstitious reasons, but because logically you will be feeling most confident and likely trading 'in the zone'.

That is the one time to really shoot for the stars and bet big if being an exceptional trader is your goal. Most traders do the opposite as mentioned by a previous poster, which is probably one of the main reasons so many people in trading can talk a good game but not play one..

EDIT- two caveats to this: 1) Do not be reckless or arrogant when you are betting big or this can easily backfire, and 2) If you take a loser or two then you MUST scale your size back down quickly, otherwise you could bankrupt your whole trading account fast. You need iron discipline to trade like this as it can really fire the emotions.
 
Quote from BlackBison:

That is one of the main ingredients as to how I achieved my great gains (see the link in my sig). Pretty much any veteran trader or poker player will understand this concept. Press the advantage and go for the jugular when you are winning, not for any superstitious reasons, but because logically you will be feeling most confident and likely trading 'in the zone'.

That is the one time to really shoot for the stars and bet big if being an exceptional trader is your goal. Most traders do the opposite as mentioned by a previous poster, which is probably one of the main reasons so many people in trading can talk a good game but not play one..
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This reminds me something I used to do frequently (very frustrating) and something I know many traders do. If you've taken back-to-back losses and you're currently in a winning trade, there's a strong temptation to take off the trade once the unrealized profits zero out the realized loss. Many inexperienced traders will dig a hole, dig themselves out of the hole and then stop trading. They cut a winner short and/or stop trading at the point that they're clearly in tune with the market!

They then paper trade the rest of the setups and make huge paper gains and whine about the day's result.

We're in this to make a living. Either you're the gambler who picks and chooses which hands to play or you're the casino that plays every hand knowing it has a small but profitable statistical advantage because it's forced to play by a set of rules that provides it with an edge as long as it plays every hand.

If you don't understand and embrace this concept every trading day, you should not be trading real money that you can't afford to lose.
 
Yeah, disposition effect can be a real fallacy.

Many profitable trading methods are based on cutting losses short and running winners. And they work perfectly if the trader doesn't wreck them by not holding winners long enough.
 
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