I sternly believe to risk a small percentage of trading account on a single trade. This eventually makes you take up small position size and your margin will also stay below the account’s equity.
%% That; + trading too much.........................................................................................
%% Sounds like bad data; but actually its a common pattern with plenty of liquidity, in all 3 of these. Open price JAN 4 to todays open price; QQQ=positive YTD; QLD= negative % year to date TQQQ= most negative%, year to date of the 3 [open price to open price] NO way would i put on a position that in any way/ could ''result in wiping out you entire account'' NOT that you would. Thats how some get in trouble with time shares also\perpetual fees\fees\feees/LOL,
This works perfectly well for new traders trading with low leverage ratio. Lower position size means little fluctuation in the account, which in turn keeps the emotions at bay and thus a decent trade.
%% Since you are interested in SPY; may want to print some charts of SPLV. It tends to go up + down a bit les than spy+2 million -14 million per day volume.......................................................NOT a prediction
No. Follow asset allocation rules when making long term investments. There are four primary asset classes: Equities Fixed income Currencies Commodities There’s also volatility and derivatives on those assets. For a long term portfolio your goal is to maximize returns while minimizing drawdowns. You do that through investing in a combination that makes sense given your outlook and then blend that with the market portfolio (the actual allocation of capital across asset classes).
%% MOST investors make millions by buying [SPY for example or qqq] every month for 30 /40 years..................................................................................................Drawdowns are a traders term or turtle term+ most traders dont make money And most of the big bucks in real estate are made by people that may not even know what a drawdown is/but i realize not every one wants to be a millionaire or billionaire. I dont want to be a biilionaire myself + prefer some stuff that drawdowns + some that does not. Thanks.
Well, you minimize drawdowns by reducing the covariance in your portfolio. That allows you to eek out more return per every unit of portfolio risk.
%% So many want to minimize drawdowns/fine/ fine with me , to a degree. I make sure to trade some ETfs with big % gains + drawdowns. 3rd friday week end of MAR tends to be down; unless they were front running that for 3 weeks in QQQ??? Of course drawdowns in QQQ + SPY tend to be much different than GM\ DAL/Bear Stearns/which bankrupt + never recovered for the buy + hold stock holders. NOT a prediction, not bank insured...................................................................................