LMFAO hahaha hahaha lol hahaha haha Maybe some traders need to understand the trading expectancy formula. Positive equals edge. Negative equals no edge.
Sorry to hear about your friend. But there is no way on earth I have $450k in my trading account and I lose it all to $0.00 Setting a money management rule of 50% or even 30% drawdown of initial capital could have saved your friend a lot of losses. After 30% drawdown, the trader must stop trading that trading method. It's good to make money, but we have to know when to stop trading too.
My personal money management rules is stick to the 2% risk per trade. No more than 5 trades on at one time. This reduces the total risk to 10% on a worst case scenario. Most times, your losses will not reach the 2% or total loss. A drawdown of 10% you can live thru and overcome. The larger the drawdown you have say 50% or more, the harder it is to claw your way back up to just breakeven. Do not be deceived by the 2% as not being enough to generate substantial returns. Also, remember to respect your stop losses especially, if you are using mental stop losses.
Maybe the stop should be tight per the strategy. My point is, it does not matter how tight/wide the stops are, after XX% of initial capital loss, the trading the method(s) must be stopped.
Thanks smallfil, I am starting to use 2-3% risk of initial capital as well. What are your money rules for when to stop trading for the day after losses? I would like to use percent as well.
Assuming the story is true and as this is ET, that's a stretch. The guy was not a day trader, the guy was a non-trader attempting to day trade. Any dope can make money on long positions in a bull market.
Exactly... That's why if you can't beat a buy and hold strategy with an index ETF you probably shouldn't be trading
Makes sense but not practised even among top professionals. Most hedge fund managers, many of them very well-paid, lose to a buy and hold strategy with S&P500 ETF during the past decade.
It's an industry. Convince the public that they are too dumb to understand the market and charge a couple percent to underperform. Nice money if you can get it. Don't want too much competition. Regulate the industry so that only who you choose can play.