Risk management is more than just tightening a stop loss. Anyone can do that. You only have to look at Options Sellers, LTCM, Timothy Sykes (yes, he ran a $10 million hedge fund) because he did not have risk management. He put all his monies on one company and failed to cut his losses. Now, how smart is that? How many have blown accounts? I will admit to that and until, I wised up that Risk Management should be job number 1, I did not improve as a trader. I have probably, talked about Risk Management more than any trader on the ET message boards because I believe it is an integral part of trading, and to one's success as a trader.
how to learn trading?
- Thread starter Aryan.1234
- Start date
Risk management is more than just tightening a stop loss. Anyone can do that. You only have to look at Options Sellers, LTCM, Timothy Sykes (yes, he ran a $10 million hedge fund) because he did not have risk management. He put all his monies on one company and failed to cut his losses. Now, how smart is that? How many have blown accounts? I will admit to that and until, I wised up that Risk Management should be job number 1, I did not improve as a trader. I have probably, talked about Risk Management more than any trader on the ET message boards because I believe it is an integral part of trading, and to one's success as a trader.
Risk Management involves many many things beyond "tighten entries".
It involves the following:
Proper Capitalization
Diversification to prevent risk of ruin (e.g. your trading is via a small capital you pulled from your investment portfolio or whatever) so that if you blow up your trading account. Life is financially still normal for you.
Proper Leverage / Don't trade on margin - Recent traders of Light Crude Oil CL futures learned about such when Oil traded negatively and many brokers hit their clients with millions of dollars in margin calls.
I'm not going to bother with many other aspects of risk management because I'm sure you get the point that its much more than "tighten entries".
Heck, it was recently revealed by your own screenshots that you only trade Forex in 0.01 Lots. If that's only a few percentage of your total trading capital...you're then using good risk management to prevent risk of ruin.
wrbtrader
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Some also intentionally do not share it all just in case a few anonymous idiots out there decide to violate copyright protection involving their book.
Seriously, this is the internet...if you write a book about your trade setups and you know you have 5 trade setups. Do not write about all 5 of your trade setups...only write about a few of them because eventually someone out there is going to share it with others without your knowledge.
You can then have some insurance that at least your best trade setups is still only being used by you.
wrbtrader
It seems like you have learned nothing in your 30 years of trading.
A 100% win rate is impossible over the long run.
Agree but I'm still scratching my head about this statement by Padutrader...
April 13th, 2020
He must have been sarcastic like President Trump recently stated when he said those infected with Coronavirus can inject disinfectant or UV light in their body to possibly cure themselves.
wrbtrader
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Apparently blowing up his account in 4 days is considered consistent.
He is right about one thing, consistent blowing up.
^^ this
although its not known exactly if Larry Williams made money from his trades or what is net worth is today.
based on just facts - Larry has sold quite a few books, sells seminars, therefore its possible his wealth comes from OPM... just a guess.
for the OP
https://www.thebalance.com/larry-williams-book-review-809322
https://www.thriftbooks.com/a/larry-williams/242232/
https://www.ireallytrade.com/futurescommodities/
I will say a couple things about this. I'm an amateur mathematician so I can relate trading to the study of mathematics.
When you just start out trying to learn something that is really complicated and deep, one of the first things you realize is that you can't make big comparisons. The big picture is hard to grasp.
What I mean is, if I asked you to compare options trading with futures and stock trading what would you say? How about if I said, which markets are best for trading short term? Or, how does the treasury market interact with the stock market?
Someone without deep knowledge will be stuck trying to answer this type of question.
These are basic questions, but they require expert knowledge. This is why trading is hard.
Interviews and discussions with real traders will help you learn in this way. Being able to see the big picture is really important. Many traders are only good at one thing.
I found that I had to ask myself very difficult questions whenever I started learning about new concepts, techniques, or markets. Also, read as much as you can, and challenge yourself.
The best students constantly challenge themselves to connect previously learned concepts, techniques, and ideas.
When you just start out trying to learn something that is really complicated and deep, one of the first things you realize is that you can't make big comparisons. The big picture is hard to grasp.
What I mean is, if I asked you to compare options trading with futures and stock trading what would you say? How about if I said, which markets are best for trading short term? Or, how does the treasury market interact with the stock market?
Someone without deep knowledge will be stuck trying to answer this type of question.
These are basic questions, but they require expert knowledge. This is why trading is hard.
Interviews and discussions with real traders will help you learn in this way. Being able to see the big picture is really important. Many traders are only good at one thing.
I found that I had to ask myself very difficult questions whenever I started learning about new concepts, techniques, or markets. Also, read as much as you can, and challenge yourself.
The best students constantly challenge themselves to connect previously learned concepts, techniques, and ideas.
It takes years and reading thousands of ET posts like yours to appreciate what you said.
Few amateur traders understood.
Be nice.Apparently blowing up his account in 4 days is considered consistent.
He is right about one thing, consistent blowing up.
@padutrader likes to post lots of nonsense trolling us. If you cut through the nonsense, carefully read all his posts, distilled his trading philosophy, you will find some wisdoms hidden within. You just have to read carefully.