80% directional position. not 2% a trade

Discussion in 'Trading' started by Batman28, Jan 24, 2008.

  1. there are countless number of posts here advising how u should not risk more than 2% a trade and cut losses quicky. this is ok if u want to make a living out of trading. but if you want to make serious money u won't get anywhere.

    to make serious money like the biggest traders have you must:

    1. trade very infrequently but when you trade u place a 'bet' not a trade. u trade not on something that's already priced in you trade the outcome on something that is uncertain.

    2. you risk 100% of your capital with ur stop loss placed at 80%. your target should be minimum 50% on the upside.

    this is the only way to make serious money. sure if you can't place good bet trades you blow and thats how it goes. if you're right you should have roughly 2x the level u started with you give u 2 extra life lines.

    day trading with peanuts and 1% risk/reward target won't get you anywhere. chances are you'd get bored and tired and actually lose money.

    you obviously need to be patient for that good call bet. not random trades.

    so in short:
    infrequent trades
    max risk (100% capital)
    betting on uncertainty - not expectations or anything getting priced in the market.

    this strategy will have SD of 50%. so you will be up and down drastically but on average if you're calling correctly you should be up 50% every week.. if u like more details i will clarify.

    remember 2% this 1% that is a losers game. to make serious money you have to place big trades. big bets. take big risks with very wide stop loss points.
     
  2. I agree that reward is always proportional to risk, both in terms of position size and reward expectancy. What risk:reward ratio do you suggest (as far as stop size vs. limit size)?
     
  3. That means you can only take 5 stops in a row. Most will not survive over time trading like you lay out. Trading is a game of statistics. Even if you get lucky initially you will eventually give it all to the house. If can't trade with 2% and make money means do not have enough capital to trade safely.
     
  4. You can't be serious? This is quite possibly the dumbest thing I have ever read on this site and believe me I have read some dumb shit on this site.

    You of course can vouch for this 'strategy' because you yourself have successfully employed it for years correct? I guess you now live in the Bahamas, with homes in Mooloolaba and San Marino?

    This site is called 'Elite trader', not Drunken Gambler.

    I have no idea what you're smoking but can I have some? :D
     
  5. I swear, some of the shit on here is incredible.
     
  6. it's very simple. but this whole risk/statistics crap everyone's thought has got them all confusing.

    you will position 100% capital on each trade with 80% stops. e.g. with $100, $2 per point with 40point stop.

    if in plays in your favour you should look for minimum 20points/40-50%.

    if wrong, you will play ur next trade with $2 per point with 10 point stop if u lose your out - but very unlikely. even a monkey can guess market 50% of the time.

    the key is trading the 'bet'. by this i mean very infreuquent trades but very very confident and once put you don't look at the P&L. even sleep on the position over night. it will either work or not. but the payoff is alot larger. try it with 100 bucks it's very simple. all u must do is not random silly bets but a thoughtrough one and once placed get totally divorced off and leave it to play.

    I can demonstrate this with a online card game and prove it. u must really grasp probability well.
     
  7. no. you don't place 100% on the 2nd trade. that would ridiclous. u reposition with stop at fixed at 40point. the chances of u losing is 25%. the most difficult part is to stay out of the market when u don't see a trade.
     
  8. You're an idiot!!! Time for the ignore button.
     
  9. no dumbass. guess wot - I don't even trade. but I work with a range of traders and see what goes on. I know wot im talking bout. if you don't like it look away. if anything, try it with paper money. I promise u'd be surprised. playing for 1%/2% and thousand trades a week is the most difficult life on earth. you'd never make serious money that way. probably lose over time if u cant pay attention like a robot.
     

  10. This is where you're wrong.

    Predicting market direction is 50/50.

    Predicting exactly WHEN the market will move in your direction - without taking out your stop - is the HARD part.

    Run a Monte Carlo sim with a tight stop, take profit at 5 to 1 risk, with random entry. Watch what happens.
     
    #10     Jan 24, 2008