Discussion in 'Psychology' started by ElectricSavant, Apr 1, 2006.
or at least buy a new car?
Hi Electric, where do these questions come from?
Sure, I'd double no triple my position sizes so that I would make 3 Million in a year
Yawn..... I'm off to bed soon.
I just was curious how a trader handles money management and I thought to ask it in a Savantish way to bring it out...thats all...
go to bed granny..
LOL, no problem. For a while I was up late and I would notice you posting and the threads were a nice divergence (think you were trading the Yen or something).
Anyway, as for MM... well.. if you told me I'd have 1 mil in a year and no appreciable draw downs, I'd up the position size as much as I could. But does such foreknowledge exist?
The idea here is
Not necessarily in that order
I am in hopes to hear from those that are there...that have been there...and have the vision to get there...
as far as foreknowledge, i think every trader has the vision...
is there anybody that would REDUCE their size if they had a larger yield than they counted with? percentagly (is that a word?) speaking?
You really should know better.
All any goal requires is to work backward from your target
If you want to make a million dollars, you start by looking backward one step at a time. Each step requires that you answer (correctly) a question.
For example, your goal is to make a million $ trading. Alright how long do you have to make the million dollars? (say 1 year?)
Next question, how much do you need to make on a weekly basis to hit your goal? Answer.. you divide 1 million into 50 parts (weeks) and you know that you have to average $20,000 profits each week to hit your goal.
Next question, "which market(s) do I know well enough to trade and can provide sufficient liquidity to permit me to make a million dollars over a years time"? (Answer...I know the S&P500 futures market well enough and I know it has sufficient liquidity")
Next question, "Which trading approach will provide the best chance of making $20,000 dollars per week?" Answer....?
Next question, "What size trading account do I need in order to fund my trading account?"
Next question "What size positions do I have to put on in order to make $20,000 per week?"
What is the minimum profit target on a per trade basis necessary to hit my goal?
What is the maximum stop loss I can tolerate and still hit my goal?
Are you getting the idea?
Thats how its done. Simple.
That's exactly how you waste an edge.
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