smaller size makes you a better trader?

[murray t turtle]

Quote from brokerboy:

if we had them trade smaller size would they be better traders? is size the death to a small trader?

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Bro B, this is murray TT;

Two , maybe more [2] reasons large size[%%] blows accounts;
a]get rich quick[insane leverage] seldom . if ever works for long or short LOL.[Ask Bear Stearns, Lehman, LTC,or any that tried it


[z]Even if one could find a 88% hit rate[talking about position trading with mostly 3 trends agree...[not that most money is made with high % hit rate anyway] ;

Still could easily have 12 months in a row wrong [12 months consecutive wrong/lose out of 100 months wrong=88%} Most experienced traders know[profit proved] the answer to your question is yes; smaller % is a key.............................................................................................
Wisdom is profitable to direct;
of course that's only part of it.Lotto[small risk] get rich quick pattern again, is a stupid tax on people that cannot do math

 

[trader198]

small size does not make a better trader.

you still donot know how to trade. it means you are in the mode of water testing. in reality, you do not know what you should do, youhave no idea about what kind of trading skills you need.

small size trading means you have some sense of risk concept. but you donot know what size is suitable. it is a no-brain risk management strategy, very aweful. if follow this logic, then zero size will be a super star trader, really? NO.

a good trader knows what he can risk, also knows what he should do. you should trade a size suitable to your account size or your tolerance.

 

[brokerboy]

Quote from trader198:

small size does not make a better trader.

you still donot know how to trade. it means you are in the mode of water testing. in reality, you do not know what you should do, youhave no idea about what kind of trading skills you need.

small size trading means you have some sense of risk concept. but you donot know what size is suitable. it is a no-brain risk management strategy, very aweful. if follow this logic, then zero size will be a super star trader, really? NO.

a good trader knows what he can risk, also knows what he should do. you should trade a size suitable to your account size or your tolerance.

i would say your a day trader with a small amount down and its not a attack. i feel size shakes you out of a lot of good trades this is my point. i will say it in another way if you take all your trades in a year and make them smaller trades would you have made more money than larger positions with quicker stop out's. the smaller trades give you more room to let a position trade.

 

[Visaria]

Quote from Visaria:

The numbers are wrong. 1% risked and lost 50 times leaves you with about 60%. 2% risked leaves you with about 36%.

I would advise no more than 0.5% per trade, which is what i use on position trades and something like 0.1% (or even less) on intraday trades.

Quote from Maverickz:

I threw together some VB code to determine the values. In the code I multiplied the current balance by the risked % (1 in this case) and subtracted the resulting number from the current balance. I then looped through that code the desired number of losing trades and finally calculated what % of starting balance was left. Those are the values that I got.

How did you come up with your values?

VB code, wtf? :eek:

I just used a calculator:

0.99 to the power 50 = 0.605
0.98 to the power 50 = 0.364

The level of mathematical illiteracy on this forum is staggering. I had a poster who claimed to have worked at a major firm (sweeping the floor, i reckon ) pming me explaining mathematically how the "house" negates any advantage because they have the edge (his words). I replied back and showed him how all his numbers were wrong. Never heard back from him!!

 

[Maverickz]

Quote from Visaria:

Quote from Visaria:

The numbers are wrong. 1% risked and lost 50 times leaves you with about 60%. 2% risked leaves you with about 36%.

I would advise no more than 0.5% per trade, which is what i use on position trades and something like 0.1% (or even less) on intraday trades.



VB code, wtf? :eek:

I just used a calculator:

0.99 to the power 50 = 0.605
0.98 to the power 50 = 0.364

The level of mathematical illiteracy on this forum is staggering. I had a poster who claimed to have worked at a major firm (sweeping the floor, i reckon ) pming me explaining mathematically how the "house" negates any advantage because they have the edge (his words). I replied back and showed him how all his numbers were wrong. Never heard back from him!!

I used VB code for two reasons. First this little tool does a LOT more than this one calculation. Second in this scenario, I wanted to also calculate starting and ending balances and various values automatically that would be a lot more steps and more time consuming using a calculator. Now, I did have a bug in this portion of code that only caused it to iterate through the loop a max of 25 times so yes my numbers are wrong and yours are correct. I never noticed before because I never simulated more than 25 trades.

On the rest of your post, yeah I bet that would have been funny to see.

 

[Visaria]

Mav, if you are simulating trades allow for at least 50 trades and preferably 500 for a more robust sample. 25 is not enough.

 

[Maverickz]

Quote from Visaria:

Mav, if you are simulating trades allow for at least 50 trades and preferably 500 for a more robust sample. 25 is not enough.

Yes the tool has been fixed now. It not so much a specific trade simulator as it is an account simulator. Basically it allows me to simulate various win/loss ratios at different % levels to see how an over all account will be affected. I am still have some tweaking to do.