Hi all!
1. Could you please explain to me more about underfunding.
Let's suppose we have $15000 and going to daytrade stocks (let's forget for a while about $25000 restriction).
Could you please explain, if this funds are enough, or not and why.
My idea is you need to use your funds for MM (let's say, loss per trade). So, if you have, for example, $15000, so you can have a loss $150 per trade. Hence you plan your day. You will need to have 30 "-" trades IN A ROW to lose $4500. Where am I wrong? Just trying to understand it clearly before entering the real market.
2. I hear sometime traders say "I used 30% (50%, whatever) of my capital for this trade" (or they say "I risked ...% of my cap", meaning the full amount of money in a trade). Is it so important what % of cap is used for each trade, if we use the loss limit (hence we won't be able to use more cap than is allowed by rules for each trade).
Appreciate any help.
Thanks
1. Could you please explain to me more about underfunding.
Let's suppose we have $15000 and going to daytrade stocks (let's forget for a while about $25000 restriction).
Could you please explain, if this funds are enough, or not and why.
My idea is you need to use your funds for MM (let's say, loss per trade). So, if you have, for example, $15000, so you can have a loss $150 per trade. Hence you plan your day. You will need to have 30 "-" trades IN A ROW to lose $4500. Where am I wrong? Just trying to understand it clearly before entering the real market.
2. I hear sometime traders say "I used 30% (50%, whatever) of my capital for this trade" (or they say "I risked ...% of my cap", meaning the full amount of money in a trade). Is it so important what % of cap is used for each trade, if we use the loss limit (hence we won't be able to use more cap than is allowed by rules for each trade).
Appreciate any help.
Thanks