Have a forced money management plan

Discussion in 'Risk Management' started by jearnest, May 26, 2005.

  1. jearnest

    jearnest Velocity Futures

    Ok...so generally about 90% of the traders loose money in futures trading...and generally the odds can't be that bad. And prop traders generally make more money...ie, a higher profit percentage due to more strict controls...

    So...assuming that these things are true..for the sake of discussion.


    Would any of our customers like to participate in a forced money management plan...whereby...

    rules are forced upon you for your max loss and max position while you trade....?


    ***just curious....


    email me if you are interested...

    Jay
     
  2. A well developed methodology and trading plan normally has a forced money management plan, doesn't it?
     
  3. I think he saying externally forced, rather than relying on your
    own self imposed discipline.
     
  4. What a concept!!

    Does it really come down to 90% of the population not having any real will power or discipline?

    1. People who lack discipline help my bottom line (panic selling and impulsive buying produce stronger moves). More panic and more deperation = greater volatility IMO. Don't take fuel away from the fire...

    2. Should I ask my broker to hold my d--k while I take a piss? Not sure IF I WILL BE ABLE TO FLUSH:D

    3. Doesn't margin already do this?

    Mike
     
  5. Margin only does this if your current money management plan consists only of not exceeding your margin limits (ouch).

    I agree this does seem pretty bad (that it would be necessary) but I bet a lot of traders would benefit from it. I certainly have violated my own MM rules on occasion, sometimes to my benefit but mostly to my detriment.
     
  6. Part of the reason that so many fail in trading is because there is not external control. No boss to tell you sell now and take the small loss. trading offers absolute freedom and most people never adjust to this because as you grow up society has always dictated to you what you should do whether it be from your first grade teacher telling you to raise your hand if you want to speak or your boss telling you to do a task or even a client who you are doing a job for. When you take a trade only YOU can make the decision what to do next and after being programmed for years to take orders from others, most people never can get over the hurdle of reprogramming their thinking in order to trade successfully.