What Really Counts Getting Started

bone said:
Your point is just spot on when it comes to a noob trying out swing trading. I've noticed a razors thin edge between engagement and dissassociation - and it comes down to participation. I struggle with it quite frankly.
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Too much or too little. Overtrading is a big killer. Not trading, at all. Another. Helps to watch more markets if too few signals being generated. Incorporating higher time frames etc. Finding good technical levels and setting alerts when hit....so free time can be had away from the computer to prevent burn out. While still active. Trading is weird. Its what we make it. I don't like to spend more then a few hours a day watching screens. So I don't..... If I miss setups, whatever. I usually catch a few. Can always get in later etc.
 
If you can average $200 a day consistently trading then you can average $2000 and more over time but Bone is correct, be conservative about increasing size. I would also recommend keeping a journal not only of your trades but your thought process during the day. Most of us learned how to trade before we learned how to correctly behave consistently....you have to face your fears and weaknesses and deal with them.
 
speedo said:
If you can average $200 a day consistently trading then you can average $2000 and more over time but Bone is correct, be conservative about increasing size. I would also recommend keeping a journal not only of your trades but your thought process during the day. Most of us learned how to trade before we learned how to correctly behave consistently....you have to face your fears and weaknesses and deal with them.
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And what Speedo says here is about as close to the proverbial "Holy Grail" as you'll ever see.

I think it's important to have modest, achievable expectations starting out - it gives you no wriggle room to BS your way out of your mistakes. And if you set a modest goal of $200 every day but average $325 then hot damn - you'll be able to bump up sooner.
 
Zzzz1 said:
I side with @Overnight here based on his response to your identical post in another thread. Just 1 contract alone and a mere 200 dollar daily risk limit should necessitate a starting balance of around 20,000 in order to not exceed a 1% loss per day. I get your motivation in that your business targets bloody beginners with little in their accounts. But any approach that risks more than 1% per day is reckless and irresponsible to teach. It is much better to learn and study and test ideas while building up a solid account balance before even putting on the first trade. I disagree with your approach of "coaching"
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Explain why a trader should not risk more 1% or max 2% of an account. If for instance, trading 1 contract of NQ and putting up $500.00 each contract and risking $60.00 to $80.00 trade with hard stoplosses and a win rate of 78% on average. In such a case, is the 1% BS and if it is why? Why would one need 10,000 dollars in the account? Just asking to see your thinking on it. Or anyone elses.
 
pinabetal said:
Explain why a trader should not risk more 1% or max 2% of an account. If for instance, trading 1 contract of NQ and putting up $500.00 each contract and risking $60.00 to $80.00 trade with hard stoplosses and a win rate of 78% on average. In such a case, is the 1% BS and if it is why? Why would one need 10,000 dollars in the account? Just asking to see your thinking on it. Or anyone elses.
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I completely agree that when it comes to math, you are right. I'm not sure how to figure out what the chances are of how many losers in a row given a 78% win rate, but even if we figure 4 in a row, which would be rare with a win rate this high, you're still only down maybe $250 to $300 if this string of losers happens right at the beginning. After just a few good initial trades, you're already built some breathing room. But......

What you describe is the absolute best case scenario that is not very probable. First of all, I haven't seen any stats on who is showing a 78% win rate. I've been privy to some stats, and none approach this high win rate. It would take an exceptional trader, and if he is exceptional, having only $500 per contract wouldn't be the case. Most traders go through losses... then maybe a BE period, maybe some wins, then more wins, and by the time they are consistent with a high win rate, I'm sure they already also have some nice profits under their belt.

The second factor is the R:R ratio. If risking 60 to 80, and hence 3 to 4 points, what is the average win size? With a 78% win rate, I doubt the win is even twice the risk. If the win is 8 points, stop is 4 points, and win rate is 78%, jesus, you're pulling in shit loads of money. An 80% win rate is even awesome for 1:1.

The biggest hurdle though is that of experience. You see, in order to get such a high win rate, you have to be never scared to take the next trade, which is really hard for a newbie, or you have to be so meticulous with your entries, to afford such a high win rate, that you know exactly when to enter and when to pass. This once again is only in the realm of super experienced. The super experienced trader is not limited by capital.

But I do agree that a 78% win rate, along with a stop of $80, allowing for a full 6 stopouts lets say before going bust is good math, and after just a few initial wins, which you would expect given such a high win rate, the buffer is already there. Hopefully this win rate though is an equal mix of longs and shorts, or at least trading only one direction but during both bull and bear markets. 5 NQ points is of course possible on both up and down days, so it would be easy to focus on just one side if that is what the strategy entailed.
 
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