Hi, My biggest problem with money management is accepting I could have made more. I'm trading a small size of my account and I get rows of wins but it's much slower in adding up when you use a small portion of your account. Sometimes I then think why haven't I invested more. I could have made a lot more than now. Biggest problem is when you're wrong you can lose much more with a single trade if your trade size is bigger. It's difficult to accept.
You have to look at the long term picture...and keep focused on that. I've made the mistake and I know plenty of others have as well - of throwing too much capital at something that was working well and getting washed out very quickly. THAT MISTAKE is so much worse than being conservative and just incrementally working your way up to the big egg. I give up lots of extra profits every week. But I tend to score a nice solid return that - over time - adds up very nicely. I have learned to look at what I'm getting as opposed to what I could have gotten. As you get larger, try to be even more conservative. It's hard, but it's how you win the race.
There is no right or wrong answer, per se. -- You, as the trader, decide how much Risk vs Reward you want to take on Of course, everything is crystal clear in hindsight...it's easy to say I should have done this or that. Trading is not about dwelling, or looking, at the past; but how you handle the immense pressure in the heat of the battle. As well as foresight ability.
I like to think of trading as running a casino as I heard from that podcast. https://chatwithtraders.com/ep-072-rob-discovery-trading-group/ As the house you know you have a small edge in probabilities. Your goal is to grind out the bets and let your edges probabilities play out. You start making too large of bets and you'll soon learn that probabilities don't always come out as expected with small samples. Flip a coin 10 times and record the results of heads vs tails... Do this several times, it's quite often not 50:50. You need to be able to withstand the strings of heads/tails with proper position sizing and risk management.
Stay the course brother, you're doing fine. Perhaps you could have made more, but think about all the losses you've minimized by managing your risk so well.
Same Problem happened to me when I started trading. When I win any trade, I will very small. But when I lose, it is huge! So, after trying so many things. finally, I switched to long term traders. And now I am just doing great!
lets see your current thought: you intended to make (more) money but you are afraid of the risk of losing (more) money your fear may a result of: a. bad past experience / trading trauma b. lack of understanding of what you doing c. lack of confidence in your trading system d. trading beyond your comfort level e. or else? you need to address and tackle the root cause of your fear only then you can work on efficient capital management
You thinking of the money too much, think in more terms of percentages. I had much hypnosis done on accepting, and it not only dealing with trading, but life outside of trading. I have learned that I am not taking money out of the market, but in terms of receiving what the market willing to give me, different mindset. And be happy that the other 95% are willing to give you profits, I laugh everyday, even when I lose now, where else can you lay in bed and make this kind of money with a laptop?
Is that so? I think that is suicidal! Suddenly switching from short to long? You can lose your account in a blink of an eye!
Unless you can have $1000+ in your account! What are you man? why is it suicidal when you have enough to pass the day and trade according to market situation? Do you trade with a $20 account?