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How to never get an account wiped out?
- Thread starter gg12
- Start date
05/04/07 +30.8%
I spend all the time of the day for making this profit.
Really hard work...
My bet was that the Dow will stay below +25 and above -25.
I closed positions early to avoid a huge loss.
Yes, I was risk averse, but 50:50 chance means that you are out of any position. No edge - no position.
Happy that I did well, but there is a long way to go!
I spend all the time of the day for making this profit.
Really hard work...
My bet was that the Dow will stay below +25 and above -25.
I closed positions early to avoid a huge loss.
Yes, I was risk averse, but 50:50 chance means that you are out of any position. No edge - no position.
Happy that I did well, but there is a long way to go!
Attachments
money77man
When thinking of risk in terms of pure volatility you should only take one side wing of the distribution. High vola can work in your favor you are prepared riding the waves. For scalp trades different rules apply. And for vola trades (straddles, strangles, etc.) your judgement is probably best using vola. In that case your have no normal distribution because stock markets have either small moves or sometimes unexpected huge moves. The small moves can somehow be controlled but not the very big ones - like the black swan events.
The conclusion is that one could decide to trade against small waves and in the direction of huge waves. But who knows?
It's like going surfing in Hawaii.
(But a few people are experts in that).
When thinking of risk in terms of pure volatility you should only take one side wing of the distribution. High vola can work in your favor you are prepared riding the waves. For scalp trades different rules apply. And for vola trades (straddles, strangles, etc.) your judgement is probably best using vola. In that case your have no normal distribution because stock markets have either small moves or sometimes unexpected huge moves. The small moves can somehow be controlled but not the very big ones - like the black swan events.
The conclusion is that one could decide to trade against small waves and in the direction of huge waves. But who knows?
It's like going surfing in Hawaii.
(But a few people are experts in that).
Captializing on the intraday uptrend in the DOW.
I also knew the statistics that a gap with 35 - 40 points has a probability of ca. 80% to be closed the same day.
05/08/07 +32.0%
Risk was high. May be 60% of my account worst case on a big downmove.
Positve: I am now performing gains averaging 3% per day since 84 days.
Negative: At the beginning of the quarter (Q2) the account was 17.5% higher than today. There needs to be more progress this quarter.
I am reaching big learning targets.
I also knew the statistics that a gap with 35 - 40 points has a probability of ca. 80% to be closed the same day.
05/08/07 +32.0%
Risk was high. May be 60% of my account worst case on a big downmove.
Positve: I am now performing gains averaging 3% per day since 84 days.
Negative: At the beginning of the quarter (Q2) the account was 17.5% higher than today. There needs to be more progress this quarter.
I am reaching big learning targets.
I have decided to raise my daily profit target.
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From today May, 8th I am using a daily profit target of 3%.
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The risk has to be in balance.
From experience I have an about 2:1 risk:reward ratio.
The last successes are due to short digital strangle writing.
Time is money if the market moves sideways.
--------------------------------------------------------------------------
From today May, 8th I am using a daily profit target of 3%.
--------------------------------------------------------------------------
The risk has to be in balance.
From experience I have an about 2:1 risk:reward ratio.
The last successes are due to short digital strangle writing.
Time is money if the market moves sideways.