The myth of letting your winners run

Hmmm.... seems like our friend Savoir took another beating from the market this week.

 

LOL, you wish. But I do see that I could have been more diplomatic in my reply to your post. Please accept my apology.

 

Not true...not true at all.

If I have 100k then I can trade in ways that a $2000 account trader cannot.

(RegT and SPAN rules)

Not only that it's a much bigger deal to make 10% in a month when you trade size. Making 10% on 2k over the same timeframe is a complete nothing.

 

That's alright Savoir, no harm done.

 

Quick tip: if you're impatient like me and find yourself taking profits too soon, opening a small 2nd account like I did may be helpful.

I have 2 different accounts, my main one for daytrading and short term swings, and this bitty one for longer time horizon swings.

 

In the Forex for instance, the market does not care if you are trading micro lots (100 pips = $10 profit) or standard lots (100 pips = $1,000 profit), so it is just as easy to double your money trading micro lots as it is to double your money trading standard lots, regardless of the time frame used, the only difference is the size of the positions.

Not sure why you are having a hard time grasping this simple concept.

 

I would guess the difference is between the ears. No one minds losing $10 but dropping $1000 is a big deal to most traders.

If you don't have the discipline to take your losses you will fail.

 

Of course, but that's an entirely different story, here we are talking from a strictly mathematical perspective, all things being equal.

In highly liquid markets (like the Forex), if a system can double a $2,000 account in a year it can double a $10 million account in a year, end of story.

 

But 2000 and 10 million are not equal.

 

"All things being equal" means the trader uses the same discipline in both cases, regardless of the size of the positions.

Yes it is psychologically harder to do, granted, but that's not the point.