When does one start trading big
- Thread starter saxon22
- Start date
this is why people need to understand game theory, and money management
it's frigging amazing
if you are trading with a 5k stop on a 50k account, you are a moron.
period.
assume that given a 5k stop and 5k target (1 point with 50 contracts) you can be successful 60% of the time
first of all, given sufficient "n", it is near CERTAIN that at some point you will have several losing trades in a row.
also, unless you are a complete robot (and nobody is), you will not be able to trade the same when you have lost 4 trades in a row and your account is down to 30k from 50k. and you won't be able to use the same size then, either.
markets don't move because they want to - they move because they HAVE to. and when you see strong market moves, the majority of the time, they happen because people are caught on the wrong side of the market and have stops hit AND forced sales due to margin calls, etc.
a professional trader manages risk.
there are few things more dangerous to a trading account than overleveraging, ESPECIALLY by inexperienced traders.
it's frigging amazing
if you are trading with a 5k stop on a 50k account, you are a moron.
period.
assume that given a 5k stop and 5k target (1 point with 50 contracts) you can be successful 60% of the time
first of all, given sufficient "n", it is near CERTAIN that at some point you will have several losing trades in a row.
also, unless you are a complete robot (and nobody is), you will not be able to trade the same when you have lost 4 trades in a row and your account is down to 30k from 50k. and you won't be able to use the same size then, either.
markets don't move because they want to - they move because they HAVE to. and when you see strong market moves, the majority of the time, they happen because people are caught on the wrong side of the market and have stops hit AND forced sales due to margin calls, etc.
a professional trader manages risk.
there are few things more dangerous to a trading account than overleveraging, ESPECIALLY by inexperienced traders.
You missed the original question by a mile or two. nevertheless, two points:
1. You are assuming a 60% winning rate and based your conclusion on an assumption. Not very mathematical is it? Be that as it may, you state that eventually there are going to be several losing trades in a row, the question is how many winning ones would had already taken place to offset the losing streak. What about if I had several winning trades first? How about if I had a system that would provide 70% of winners on consistent basis? Please, go back to the original post and read it, then post an answer.
2. Markets move because of many different reasons, and not as you stated traders being caught on the wrong side of the DOM.
Btw. Thanks for the moron remark. I was always against physically disciplining kids. You just proved my point.
Perhaps, this is why you still are trading while others are yachting somewhere around Bora Bora. After all big traders did not become big by trading 10 lots day in and out.
Since you argue that for 100 ES contracts $50.000 is not enough hen what # is ?
One more thing, in the future, try not to use the word moronic. I am averse to it.
dood.
i am trying to save you from learning the lesson the hard way. most traders HAVE to learn it the hard way.
apparently, so do you.
i didn't call YOU a moron. i said action X was moronic. it's kind of a loving the sinner, hating the sin thing. there is a difference between saying "you are a moron" and "that action you are planning on doing would be moronic"
huge difference.
there is a columbian proverb "one learns best with blood". it applies here. apparently, you need to learn with blood.
fwiw, i manage a pretty fair sum of OPM and have been very profitable, but no i don't live on a yacht somewhere. maybe in 5 years.
but i had to learn many lessons the hard way BEFORE i became profitable. i am trying to help you avoid that step. but arrogance will not help you.
i also run a business mentoring other traders. and NOTHING is more important than money management and discipline. and no, i don't call anybody a "moron". and those are most often the reason traders fail.
do what you will
i am trying to save you from learning the lesson the hard way. most traders HAVE to learn it the hard way.
apparently, so do you.
i didn't call YOU a moron. i said action X was moronic. it's kind of a loving the sinner, hating the sin thing. there is a difference between saying "you are a moron" and "that action you are planning on doing would be moronic"
huge difference.
there is a columbian proverb "one learns best with blood". it applies here. apparently, you need to learn with blood.
fwiw, i manage a pretty fair sum of OPM and have been very profitable, but no i don't live on a yacht somewhere. maybe in 5 years.
but i had to learn many lessons the hard way BEFORE i became profitable. i am trying to help you avoid that step. but arrogance will not help you.
i also run a business mentoring other traders. and NOTHING is more important than money management and discipline. and no, i don't call anybody a "moron". and those are most often the reason traders fail.
do what you will