if you only willing to lose 1-2%, try Ether, it is a close substitute to treasury bond.
https://www.ft.com/content/a8d2c280-d2b6-11e8-a9f2-7574db66bcd5
https://www.ft.com/content/a8d2c280-d2b6-11e8-a9f2-7574db66bcd5
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Only lose 1%
- Thread starter met1989
- Start date
Its very tempting for new traders to over-trade, which can mean both over-frequent trading but also over-large trade and risk sizes.
A 1% risk seems awfully pedestrian when you have $25,000 in the bank. But let's see what you could do with this pot and then work out if its worthwhile or not taking any further risk.
Suppose you carry on risking just 1% per trade. Let's suppose you only run 1 trade per day and you exit before the close that same day. We know your losers cost 1%, let's say the winners make 1.5%. And let's suppose your win:lose score is 65%. So in a year you would run say 250 trades as a round number, of which there are 162 winners and 88 losers. Your total gains are 40,500, your total losses are 22,000. So your net profit in Year 1, without increasing your trade size with gains made, is $18,500, or 74%. This sounds good.
But if you increase your trade size as you make gains, you will more than double your capital in the year.
A 1% risk seems awfully pedestrian when you have $25,000 in the bank. But let's see what you could do with this pot and then work out if its worthwhile or not taking any further risk.
Suppose you carry on risking just 1% per trade. Let's suppose you only run 1 trade per day and you exit before the close that same day. We know your losers cost 1%, let's say the winners make 1.5%. And let's suppose your win:lose score is 65%. So in a year you would run say 250 trades as a round number, of which there are 162 winners and 88 losers. Your total gains are 40,500, your total losses are 22,000. So your net profit in Year 1, without increasing your trade size with gains made, is $18,500, or 74%. This sounds good.
But if you increase your trade size as you make gains, you will more than double your capital in the year.
in a good world you would be right but the good trades are maybe between 1.5% to 0.5% mostly in between the both. but nicely written thanksIts very tempting for new traders to over-trade, which can mean both over-frequent trading but also over-large trade and risk sizes.
A 1% risk seems awfully pedestrian when you have $25,000 in the bank. But let's see what you could do with this pot and then work out if its worthwhile or not taking any further risk.
Suppose you carry on risking just 1% per trade. Let's suppose you only run 1 trade per day and you exit before the close that same day. We know your losers cost 1%, let's say the winners make 1.5%. And let's suppose your win:lose score is 65%. So in a year you would run say 250 trades as a round number, of which there are 162 winners and 88 losers. Your total gains are 40,500, your total losses are 22,000. So your net profit in Year 1, without increasing your trade size with gains made, is $18,500, or 74%. This sounds good.
But if you increase your trade size as you make gains, you will more than double your capital in the year.
Hey I try to stick to the rule of not losing more then 1% of the account but let’s say I have a 25k account and I trade the es/spy comes out that the rest of the money is not doing anything isn’t it a waist ?
The first step when you start trading is to proof to yourself that you are consistently profitable with small size. If you have proof that you succeed in that in real trading, you can increase size.
There are two outcomes possible:
- you fail: in that case you limited your losses. So damage will be small.
- you succeed: in that case you will have small profits but you are sure not to wipe out. Downside is that you will be a millionair a few weeks later because of the slower startup with small size and so you "lost time".
Think about this and make the best choice.