What you are saying is that before we go out and risk $2,000.00 to learn the game. We should go out and get a job and save up one hundred thousand dollars? Agreed no dispute, its just that 2% is not a reasonable amount. It sounds like something you tell kids in kindergarten. Is there anyone reading this forum that has ever speculated with over 2% of there trading capital? Yours doesnât! Sure you can use the cash you get back on a no money down real estate deal to trade with. I am just saying that it is unrealistic to expect a new trader to put up $100,000.00 to risk $2,000.00 Even Trarp is flexible on this point.
I think the point about the 2% is quite simply this. Risk no more than 2% of the capital you have on a trade. That way if the trade goes wrong (even with a good strategy it happens) you will not be out of the game... So, if you have say $5000 you should not risk any more than $100 per trade, and should size your orders accordingly. There are indeed strategies that fit that kind of calculation. This has nothing to do with having $100,000 to trade with in the first place, and you would be crazy to risk $2000 if you only have $5000 to work with. If you had $100,000 to trade with then you size accordinly to risk only $2000 according to this rule. Natalie
All freely traded markets are trending at all times. There are four major trend timelines in effect at all times. The first is the the long term time frame. It lasts from months to years and is the domain of the investor. The second is the intermediate term time frame, this exists in a period of weeks to months. The third time frame, the one I am primarily concerned with, is the short term time frame, the domain of swingtraders. The fourth, a very minor time frame is micro. This exists in a period of seconds to a day or two. Daytraders operate in this time frame. Each of these can be moving in different directions at any time. It is important you know which way the trend you are dealing with, and the trend one order higher, is going. There are uptrends, downtrends and sideways trends. We concern ourselves with uptrends and downtrends for the most part as these present the easiest opportunity for us to make money. Brandon
I was just checking my email and had one in the box from the Online Trading Expo which had a link to an article by my friend Chris Schumacher who is with Realitytrader. I think that the article is very good and definatly worth your time to read. http://inet.intershow.com/ote/main.asp?site=chot03&cid=lesson0519&scode=N/A As we move on in this thread I will touch many things. I also hope that the experianced traders out there will offer some advice here too, I certainly do not have a monopoly on truth or what works. RS7 (now Erorr404) Oldtrader, Threei, RTChris, Chartwiz,metoxx, girlpower, Nitro are just a few of the people I can think of off the top of my head. Brandon