You risk a maximum of 1.25% per trade. Max 4 positions. So you are trading with only 5% of the account? I do not see what you will achieve with that! I think your comparison is flawed.
neke... I would advise reading up on risk management. Kinda funny that you don't even understand what he means when he says he only risks 1.25% per trade... but not surprising. Good luck to you but you may have better odds at the craps table.
You are displaying you own ignorance as well. I understand as much, if not more, than you about risk management. A stop loss is percentage does not mean risk is absolutely limited to that! Not putting a stop loss does not mean you are going to lose the whole amount, dude. Think in terms of probability, and you will be better for it. Let me give you a little quiz. Suppose your trade has two possible outcomes: a gain of +20% or a loss of -10% with equal chance. Would you trade this scenario? What percentage of your account will you commit to each trade? Give me you answer, and I will see how much of risk/reward analysis you understand
Lots of criticism against Neke. first off, I think if you were a newbie, I wouldn't recommend this type of high leverage trades but I've been reading up on neke's post and how he got here. Obviously, this 76k account isn't all his money. If I have 100k on the side and another 76k to start with, and be willing to lose it, I'd do what he's doing and from what I can see, Neke is more than capable of trading this account out. He's gone counter-trend but is willing to cut losses quickly. Some people can trudge along and some are willing to take the risk to get to the next level. To each his own. Good job, Neke. Hope you keep this journal up. I actually look forward to seeing your results each and every week,
Ahem.... I've traded for over a decade and consistantly make high 6 figure a year..... I think you need to brush up on ur glossary for *risk management*
I'd take the trade if it was a day trade, if it was month long hold I'd say no thanks. +20 or -10 at 50/50 chance is something I'm willing to bet at, but only with 12.5% of my account for that position, at 10% loss, it translates to 1.25% of my whole account. so 50% chance of going down 1.25% and 50% change of going up 2.5%. if it was a few hours hold, I'd be happy to take it, in a month long trade.... nah. But when you can loose 30,000 outta 90,000 in a month... something is up.
Some of you guys miss the key points about Neke. He is a grown educated man who has many years experience trading and a responsible job. He knows the consequences of his actions. In fact, he was down 20k at one point. Yes, his strategy is very risky. A few wrong trades would probably blow an entire account. However, he realizes the consequences so lets just sit back and watch to see how he works.
Lets assume your risk in that position is 10% for a gain of 20%, 10% would be 1R for a gain of 2R. at 50/50 chance of either, expectancy comes out to 0.5R (2R/2 - 1R/2 = 1/2R). Like I mentioned in the earlier post, I would not risk more than 1.25% of my total portfolio value of this trade, 50% chance of losing 10% of my account is way way too risky is quantified against my entire account, 3-4 losses in a row will nearly cut ur account in half, and you have no idea how long of a loosing streak ur gonna have, it's 50% chance every time.