Can't trade small

Discussion in 'Psychology' started by rangetrader2012, Nov 8, 2012.

  1. First post.

    I need to keep trade risk low at 2%, but I often trade 5% and even 10%.

    What techniques do you suggest to restrain my urge to gable big?

  2. sprstpd


    I suggest losing a lot of money. That usually restrains me from gambling big.
  3. I gamble big as stated in the CW parlance.

    I make frequent emotional checks to be sure I am not operating in a CW context.

    What I look for is even the smallest tinges of the big three CW emotions: anxiety, fear, or anger. Even a small tinge of any one of these is a huge hammer blasting down on my head to tell me to go flat and hit the sidelines.

    The home page of Behavioral Finance quip entitled "BF or BS" details and addresses why I look for these small tinges of emotion. They must be absent always.

    As people grow wealthier they need to adjust periodically to the size they encounter.

    For me, it is not a percent as you suggest, but feel comfortable with operating in percents. we are all not the same.

    It is extremely important to begin as small as possible in terms of capital in the market.

    Profits show that you are earning your way into larger scale operations. Only increase your invested capital from profits.

    This will engender feelings of support, comfort and confidence. Thus, there is no room for anxiety, fear and anger. Nada.

    No capital can be put in the markets, if you feel there is risk. Risk does not engender support, comfort and confidence.

    As Behavvioral Finance points out, YOU MUST KNOW WHAT YOU ARE DOING AT ALL TIMES.

    Potential traders have a high failure rate because they do not know what they are doing. They run out of money well before they figure out they know what they are doing.

    Some traders have drawdowns. Some traders send good money after bad.

    Talk to some people that take the full offer of the market all of the time. This is the standard of comparison of "knowing that you know" while trading.

    Check out what the annual earnings are of anyone you trade with. Compare that to the market's full offer.

    Start with an initial level of capital. trade with all of it less just enough to account for volatility of the market (say 6 percent). The 94% you have in the market will grow profits. Reinvest those profits to grow.

    Most people cannot tolerate even reading the above paragraph. There is a single reason why they cannot. This reason is associated with NOT "knowing that they know". All of these people got into trading because anyone is allowed to trade who has some money in an account. A saleman offered the account no holds barred. People put money in accounts.

    Then they do NOT start with the smallest amount possible for trading and grow the account with profits only.

    A lot of these people with these accounts buy "knowledge" also.
    This is the real topic here. If you begin with no knowledge and you buy some, then you get to acquire skills after that.

    What does it cost to acquire the skill to know how much money to trade? For 90 plus percent of potential traders the answer is more than is in the account they set up.

    A quick way to get up to speed in trading is to use a POA for your account and gain experience watching your account grow. Your question is always being answered all of the time.
  4. NoDoji


    I searched for Gablers Anonymous, but could only find this:

    Seriously, if you can't stick to your trading rules, close the account.
  5. xburbx


    Make yourself not do it. I am not sure how else to answer that question.
  6. With the words "trade" and "small" in the thread title, I expect emg to be here any minute with his catchphrase.
  7. Enter your orders through Excel DDE and set your risk % that way? Seriously, if you need someone to enforce this, you probably shouldn't be trading.
  8. Uh, develop a METHOD. Simple, set rules and make sure you ONLY execute according to your rules. If you have no method, then you might as well stop trading now and save your $$$

  9. Do a couple of 100 trades where you risk 0.5%. Then scale up your risk to 2%
  10. Astor


    If you are using a good system (high win rate, decent r/l ratio), position size is not a big issue. I have a very good system with very high success rate, and decent profit (30 - 80 pips a trade). Going by the statistics, I will make more if I use a bigger size. Either that or I increase my account balance, it is more or less the same.

    I am not sure for your case. You have to know the success rate of your system. If it is 70% or lower, you have to limit your size unfortunately. I will strongly suggest developing a better system with better win rate and better yields. Backtest your system until you are happy with the result. This will take some time.
    #10     Nov 8, 2012