Yes. I understand. The question that comes into my mind is how to continue to capture those extra points while reducing the risk from what you call crzy to acceptable levels if that makes sense??? (Purely a rhetorical question - not expecting an answer.) Best Natalie
I think a lot of people settle for a less then they could make and then justify it by saying that is all you can do. It is scary to commit 100% to anything, to go all out and give it your all. And I think people have a fear that if they have this higher goal and after having given it their all, if they don't make it they would feel very bad about themselves. So, this is used to justify settling for less. I know that for myself this was a trap I fell into for a long long time. Brandon
I don't maintain a constant trade risk... depending on my discretionary assessment of a given trade, I can put anything from 0.25% (sensible risk) to 2% of risk on (what I term "crazy risk")... a clustering of 2% and 1% losses (albeit on a sliding absolute $ scale) can result in some rapid and volatile drawdowns...
Totally agree... its imperative to: 1) strive to maximize a given days gains by following the plan with discipline... 2) continue to build size (my ambition is to one day be trading 100 lots)...
Thanks so much. I appreciate your comments. With the capital that you have, do you have several trades in a variety of things going on at once??
I used to when I primarily traded stocks... given that my primary vehicle is now the emini, it was necessary to enhance individual trade risk in order to compensate for the lack of multiple positions, and the aggregate risk through having them open simultaneously (these trades would, for me, invariably be executed in the same direction, resulting in no mitigation of overall risk through negative correlation)...
So do you use hard stops? Do you use time stops? How often do you get stopped out for a big loss that just keeps on going and going?
If by risk, you are referring to the point at which you would exit a trade that has failed and the maximum loss, that does make sense, because the failure point for every trade is going to be different anyway, so having a fixed stop on any trade seems like a recipe for disaster to me. Also, are you talking in terms of % of capital in this. In which case using sizing models and scaled entries could make a difference couldn't it? Another thought on the subject. Best Natalie
By risk, I am referring to % impact on account... for a given % risk and a given account level in two different trade scenarios, the $ impact of a full stop on the account will be similar, irrespective of any differences in the the absolute point size of the stops in the two scenarios...
Isn't it interesting how the thread has moved from discussing the original thought, to now more discussing the mechanical nature and considerations? Looks like a natural progression for this thread anyway which is healthy isn't it... Best Natalie