How much would you risk on a GOOD trade?
- Thread starter macintash
- Start date
Is this one lonely trade or as system of trades?
What are the stats of the losers, and how many losers
have you used to compute the stats?
What are the stats of the losers, and how many losers
have you used to compute the stats?
well..you can find some setups here and there that might give you some statistical 'edge' >50 or even 70%,but not 95%. even with 95% -there is a plenty of room for a things that can go wrong and against any odds. i see it all the time. and when those 'evil forces' on other side of your screen are running out of statistical arguments-they can always cut off your internet or crash your PC on the middle of the trading day. happened to me many times
in fact-i had such moment today on one account
OP-just buy a s** load of OTM options in that direction. rinse and repeat few times and you will own all the money in the world in about 10 -15 shots
That's still another Wall Street myth.
A trader could lose money in the long run even if his Risk/Reward ratio is 1 to 100 (in other words he is "only" risking 1 unit to make 100 units).
Take the Lottery for instance. You are "only" risking $1 to make millions (superb risk/reward ratio), but in the long run you will lose money (50% of your money to be exact).
What's important is your mathematical edge, assuming your system has one in the first place.
"How much would you risk on a GOOD trade?"
How much do you risk on a NOT AS GOOD or BAD trade?
How much do you risk on a BETTER trade?
A good trade is not determined by probability or profit.
I suspect very few understand that.
How much do you risk on a NOT AS GOOD or BAD trade?
How much do you risk on a BETTER trade?
A good trade is not determined by probability or profit.
I suspect very few understand that.
Quote from Bob111:
well..you can find some setups here and there that might give you some statistical 'edge' >50 or even 70%,but not 95%. even with 95% -there is a plenty of room for a things that can go wrong and against any odds. i see it all the time. and when those 'evil forces' on other side of your screen are running out of statistical arguments-they can always cut off your internet or crash your PC on the middle of the trading day. happened to me many times
in fact-i had such moment today on one account
OP-just buy a s** load of OTM options in that direction. rinse and repeat few times and you will own all the money in the world in about 10 -15 shots
I agree all of that is a concern. So do you risk 2%, 5% 15% 35%...
Cetainty is the basis of my approach.
The policy is to use 94% of capital. 6% is not used so that bar to bar volatility is handled. (Margin is never exceeded.)
At some point in operating a trading platform, there is a recognition that you have to "know you know".
The test for failing at this is getting a whiff of the CW emotions: anxiety, fear and anger.
Greenspan contents that fear and greed are moct significant in finance. Fear far outweighs greed, he explains.
The Arizona Gaming Commission has a motto: "You can't win if you do not play"
Your terminology is filled with "fear". Do you know why you are so frightened?.
If you want certainty buy CDs from your local bank. And even that I am not so sure anymore, with all that shutdown/default talk....
You mean you are willing to risk 94% of your trading capital on a single trade??
Please no endless-going-nowhere lecture on the meaning of life, a simple yes or no answer will do, thank you.