In my personal case, I use the following. For example in a 500 watch list of SnP500, suppose I have roughly 10 stocks. Then I will have less downfall, if I have 20 stocks rather than 10. Of course if I have all 500 stock, then my account will be same of SnP500 Index change. It is called the Law of Large Number, in statistics
Wise words; especially if its a bull market like SPY,DIA, QQQ, is in now.They [bull market/Uptrendss]tend to be more orderly than bear markets/panic selling.Not a prediction; its probabilities
who cares if you have 100x losers in a row as long as you are making $100k+ every year. Losses in a row won't buy houses, cars, etc.... if you are overall losing at trading, then life is being wasted and it's time to find that winning "trade".
Personally - if I suffer two losses in a row, I cut my size back. When I get back to two winners in a row, I restore my size. If I have three winners in a row, I will typically very modestly increase my sizing. That's what I recommend to my clients. I'll beat this drum again: a daily personal trading journal is the best tool for becoming more consistent and reducing mistakes and checking yourself.
Totally agree with regard to the trading journal. I enter EVERY trade i make into my spreadsheet together with profit/loss, commission paid and most importantly, my observations on the trade. It's NOT automated, i enter every trade manually. Gives you a feel for your trading.
100% accurate. One thing newer traders have to get used to is the notions that markets are naturally correcting and consolidating all of the time. 99% of my trades are underwater at some point in their lifespan. Unfortunately, markets very seldom go straight up or straight down without any correction or retracement. It's a fact of life in all markets that can't be avoided. Crazy as it sounds, many of my clients have trade set-ups that typically have original risk:reward ratios of about 1:1. What makes it work is that a reversal with the indicator package will stop them out earlier than their original stop-loss level set at that RR of ~ 1:1. Something to contemplate !
Essentially, a trade which is originally 1:1 reward/risk can be transformed into something like 2:1 by tightening the stops, perhaps with either the passage of time and /or the position moving in your favour. Bone, i know you are a vendor, but can you say anything on adding to positions?