all in when 100% sure of a trade like the nut in poker

Discussion in 'Forex' started by fxtraderz, Dec 10, 2010.

  1. fxtraderz

    fxtraderz

    hi all,
    I have a thinking regarding trading which is comparable to poker when u have the nut, which drive u to make an all in bet when u r absolutely sure you gonna win the pot. In trading, does anybody ever get to this level of certainty about a trade that they would all in the trading volume as if they are 100% sure they gonna win the trade, like they would in poker with the nut card?
    This has begun to become my mentality as i begin to compare the trading game with poker playing.. but to reach the clarity of 100% sure is something seem to be a next to impossible task, but it might be posible to have such clarity in certain market condition.
     
  2. sure i go all-in several times every day, it's just that my $ stop out for the day still limits me to a 4% drawdown / day. don't go all in on a trade if you don't have a plan for where you will be all-out if you were wrong. there is no such thing as the nuts in trading in my opinion- because the impossible is simply an eventuality in what we do.
     
  3. Handle123

    Handle123

    I scalp the ES, usually make on average $32-37 after fees per trade counting all trades. I have an extremely low losing percentage, but even with every thing on my side with 30 years of experience, I would never "bet the farm," in my time, I have meet several individuals who took stands like that and it might work a few times, but I don't know of anyone in this business that has lasted trading that way. Some go into teaching cause they couldn't take the stresses of trading any more.

    My first year trading commodities, I ran a 5k account in a few months to 105k only to lose it all and then some in three horrible days of limit down, I learned that day not to do that again for long term. I have made four stands in day trading (averaging down) the last few years, I am about even there, but I have learned there are ways to average down and when to quit. But after a huge bad day, your confidence is shot along with your nerves and literally trade one lots till you fell better.

    The Hunt brothers had cornered the Sliver market in 1979, they were buying up the world's silver (private citizens were not allowed to hold gold), when they had started in early 70's, silver was $1.95 and it peaked at $50.00 an ounce. Well the COMEX decided enough was enough and changed trading rules and one could not buy any more silver futures, it was the largest one day drop of 50% from 21.62 to 10.80. The Hunt brothers were billionaires who had to declare bankruptcy.

    It is like you have no idea if your heart will beat in next second, so why would you bet it all. Traders who are here trading day in day out are allowed to be here as the years go by cause you learn about money management, never risk more than a fraction of your account, otherwise, you might as well go to Vegas and bet on the red.
     
  4. Dr Who

    Dr Who

    Handle's post is right (and well done him for making scalping pay so well) but on the other hand there's nothing wrong with varying your stake if you know you have a greater edge on a trade.
    For instance, if you happen to be married to someone on the panel that decides interest rates and they tell you rates will go up unexpectedly by 50 points next day, the last thing I'd advise you to do is to make a minimum bet. Of course, the liklihood of you ever being in that or similar position is quite small........tho there must be a few people in exactly that position.........:)
     
  5. in theory, every time you enter a trade, it's correct

    how much of your trading account margin 'should be' used is based on correct v
    incorrect trade results over a given period of time, perhaps instrument traded and
    also trading system if more than one is available/used

    "win the pot" poker bets are not comparable to trading which is a game that never
    ends, unlike poker which is a continuum of new games which you can ony win by
    winning the pot

    trading performance is not about 'pot' trades but high win v low loss results —
    consistency — in which each trade is in a sense 'the pot', but not the game

    Handle123 trades 1 contract/lot his profit is $32-37 per trade
    consistent accumulated profits permits increased quantity of contracts/lots traded
    Handle123 trades 10 contracts/lots his profit is $320-370 per trade
    Handle123 trades 100 contracts/lots his profit is $3,200-3,700 per trade
    Handle123 trades 1,000 contracts/lots his profit is $32,000-37,000 per trade