Down to about $90k, where would you park it if your trading skills were trash?

Nah man go live, put enough in your account to do it right and if you drop a predetermined amount go back to paper...what's $5000 just to give it a go?

"As old Pat Hearne would say, you never know till you bet" - ROASO

 

If I want to have fun, Las Vegas is a few hours' drive and I can have more fun in LV instead of staring at my computer screen.

Trading is a business. To make money, I followed @poopy.

 

@zghorner unless you can predict with some accuracy either direction or vol I wouldn't bother going with options.

 

I cant predict shit so im out for now.

also the @ system for tagging members doesnt work anymore for some reason.

 

yea fighting noise for a couple ticks all day just isn't fun and soul crushing when you are a steady loser. I paid for that lesson, you're smarter than me.

 

I have been around the block a few time myself. We all paid for our lessons one way or another, sir.

 

As an amateur retail options speculator, my strategy is to tell the options market maker that is showing me a loss to get lost and come back when it's a winner

nfa of course

 

op i know a guy who does nothing but search for high paying dividend stocks and then he keeps rolling all that back into buying more stocks.

he has his own separate retirement income so he doesn't need to tap his stock acct.

in two years with 20k i seen him go over 200k doing this simple method. i don't know how much he trades the spy also but he has experimented with it to hedge his earnings from the dividend / stock approach.

it's not at all hopeless to recover but take it slow and methodical and have fun with it.

m

 

impossible to turn 20k into 200k by dividend reinvesting in 2 years. Company yields are only like 5%. how do you 10x that? And its not like high dividend paying stocks rallied 500%+.

 

i gave him a spreadsheet on how to leverage it up - seriously

the guy was n a car wreck and in a coma when he came out his kids had stolen everything cause they thought he would die. he got released and had nothing is in a wheelchair but he had a good income from a retirement. he answered an ad my son had placed for a rental and from there he is no where near back where he was but he's not penniless.

fixed ratio money management is like a rocketship for investing and trading. the only difference or mod that i suggest is to not back down the number of contracts once you get going. other than that you figure out your delta based on your risk tolerance and off you go.

m

below are based on my futures systems not the stock dividend trading but gives you a idea of what can be done with fixed ratio. note below the number of contracts went from 1 to 27 without any additional drawdown in the acct.

without fixed ratio




with fixed ratio



The "Fixed Ratio" money management technique, developed by Ryan Jones, is a position-sizing method used in trading. The goal of this strategy is to control risk while gradually increasing position sizes as the account grows. It is particularly popular among traders who focus on capital preservation while aiming for growth over time.

Here's a breakdown of how the Fixed Ratio money management technique works:

Key Concepts:

1. Delta (∆): This is the incremental amount of profit required before adding an additional contract or position. For example, if the delta is set to $5,000, the trader must earn $5,000 in profits before adding another contract.
   
   
2. Position Size: The number of contracts or units traded increases as the trader meets the predefined profit thresholds. The key idea is to gradually scale up the position size in a controlled manner rather than exponentially increasing risk.
   
   
3. Risk Management: The technique ensures that as a trader increases the number of contracts, the added risk grows at a decreasing rate. This is because the capital required for each subsequent contract grows progressively larger as profits accumulate.

Formula for Fixed Ratio:
The number of contracts or position units is calculated as follows: Number of Contracts=1+(Account ProfitDelta)\text{Number of Contracts} = 1 + \left( \frac{\text{Account Profit}}{\text{Delta}} \right)Number of Contracts=1+(DeltaAccount Profit)

For example:

• Initial delta = $5,000
• After earning $5,000 in profits, you can add one more contract.
• After earning an additional $10,000 in profits, you add another contract, and so on.

Advantages:

1. Controlled Risk: By setting a specific delta, traders avoid over-leveraging and ensure that position sizes grow in line with their account's growth.
   
   
2. Steady Growth: The method encourages gradual position sizing, which balances between growing profits and controlling risk. It provides more stability than the more aggressive "Fixed Fractional" approach.
   
   
3. Prevents Overtrading: The requirement to hit profit milestones before increasing position size discourages impulsive or overly aggressive trading.

Drawbacks:

1. Slower Account Growth: Compared to riskier strategies, the Fixed Ratio approach grows an account more slowly, especially in the beginning.
   
   
2. Complexity: Some traders may find this method a bit more complicated to implement and maintain compared to simpler methods like Fixed Fractional position sizing.

Comparison to Fixed Fractional Method:

• In Fixed Fractional position sizing, traders risk a fixed percentage of their capital on each trade. As the account grows, the position size grows proportionally.
• In contrast, Fixed Ratio position sizing increases position size more conservatively, based on reaching specific profit increments (delta), thus managing risk more effectively as the account grows.

In summary, the Fixed Ratio technique is a conservative approach to scaling up trading size, helping traders grow their accounts while minimizing the risk of taking on too much leverage too quickly. It is particularly useful for long-term risk management and capital preservation.