Software for Risk Management IB
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Button trader is a good solution but not great.
If your like me and most of you probably are then when your having a bad day im sure you going to push it little bit far on the risk side to get your losses back.
Bad trading i know but for most human beings this is inevitable. In days like this i have exceeded my daily drawdown limit and still not stopped trading.
This has happened a few times and with my psychology im sure it will happen again in the future and i might even lose a lot of hard earned gains.
Button trader can be reloaded and you can modify the risk parameters so hence stay in the game.
Also, button trader cannot stop you from logging on to TWS and start trading still.
I think i am going to get this programmed so i don't suffer a mammoth losing day in the future. Something like, when account is past the max drawdown percentage set for the day then it locks the program for a certain number of hours (e.g. 3-4 hours to help trader regain his composure in fast markets).
I think a tool like this will be invaluable to my trading as a small 2% drawdown in my equity will not have any effect on my psyche on that day or the next day. This is imo anyway and please don't chime in and say a trader should have discipline at all times - its easy to say that but extremely hard to stick to it day in and day out.
If your like me and most of you probably are then when your having a bad day im sure you going to push it little bit far on the risk side to get your losses back.
Bad trading i know but for most human beings this is inevitable. In days like this i have exceeded my daily drawdown limit and still not stopped trading.
This has happened a few times and with my psychology im sure it will happen again in the future and i might even lose a lot of hard earned gains.
Button trader can be reloaded and you can modify the risk parameters so hence stay in the game.
Also, button trader cannot stop you from logging on to TWS and start trading still.
I think i am going to get this programmed so i don't suffer a mammoth losing day in the future. Something like, when account is past the max drawdown percentage set for the day then it locks the program for a certain number of hours (e.g. 3-4 hours to help trader regain his composure in fast markets).
I think a tool like this will be invaluable to my trading as a small 2% drawdown in my equity will not have any effect on my psyche on that day or the next day. This is imo anyway and please don't chime in and say a trader should have discipline at all times - its easy to say that but extremely hard to stick to it day in and day out.
yes obviously if you set a 500 max stop loss for the day on BT and you get stopped out at -500 then you can always modify the risk parameters to a 1500 max stop loss and go onto to lose -1500............or you can just close BT after your down 500 and trade thru TWS and lose 5k..............the only way to prevent this kind of recklessness is thru months/years of discipline training.........as for IB (or any broker) creating a feature that locks an account after being down X amount - that will NEVER happen.........IB and every broker want traders to lose big because they will probably overtrade, trade impulsively, and trade a lot more frequently in order to "get even"...........and thats how the huge commission revenues are generated..........that's why no retail broker in the world offers risk management on the client side.........its not in their financial interest to protect client capital............but they will protect their own capital by auto liquidating positions as soon as margin maintanance fails.
are you saying that you're so undisciplined that you're not able to exit a losing trade on your own and need a computer to do it for you?
god help you all.
god help you all.
lol, I knew that would come. No, but a fail-safe feature isn't necessarily a bad thing. At least 2-3x a year I lose 3-4G out of frustration where I could have walked away with 1G loss only... and almost always it comes on days in which I'm stressed over other reasons (fight with spouse, problem with kids, etc etc)
Again, not huge effect on the bottom line, but it would be a feature that I would like to see.
Again, not huge effect on the bottom line, but it would be a feature that I would like to see.
I agree totally and i understand completely the brokers point of view. To add a risk management feauture such as daily drawdown limit would be extremely bad for business for the broker. Thats why i figure they will never offer this sort of feature and really why should they! They are here to run a business and make money just like everyone else.
However, just think about the number of traders who not have blown up had they had a simple feature like this installed.
Wow you must be the greatest trader ever. Fear and greed thats all it is. Some of the greatest traders throughout history have made the same mistake and blown up.
Its very easy to say that you would never violate your rules and if so then i applaud you because you must be a machine. But im sure a lot of traders out there are human and humans will always violate rules at some point.