You are assuming that you will always be making money without drawdowns. You are on CLOUD 9 my friend. Guess what happens when you use too much leverage and one of your trades goes the wrong way or moves so fast against you(like a Black Swan event) that even your stops don't even get hit on time?.... MAJOR FINANCIAL PAIN Its like telling a casino to get ready to take back all the money you worked so hard to win from them bcuz you were too greedy in wanting to get it all sooner rather than later. The mathematical odds are fiercely against you and will skin you alive eventually. Guess what happens if a money manager like me does that to my clients?.. I would end up being sued and/or losing my license for gross negligence. Get my drift ?? Or maybe you're one of those people that needs to have your ass handed to you a few times before you learn your lesson. Good Luck...
Reread the part about, ".... if you understand it." If you are cleaned out by a "black swan" event then you don't understand how leverage works. How do you avoid a black swan? Use a micro account where there is no chance of losing more than your deposit. Deposit enough to cover the cost of the contracts and your stop loss. So, let's say that I buy 10 ounces of gold. This requires $20 at $2/contract. So, deposit $150. In this case, if the gold price goes against me by more more than about $10, I am stopped out and lose at most the $150, usually less than that.
My point is simply that if you know you are trading something that is prone to high volatility, why are you risking you entire account? I see this King of the Micro constest going on with FXCM and observe some of their trades. On one trade they risk their entire balance. Yes, in the event of a Black Swan or some other unfortunate event, their account will be wiped out. However, these winners are in most cases simply transfering money from a standard account into a micro account so that they can take advantage of the possible $25000 prize. It makes the point that if you are going to make a very risky trade, transfer only as much as you are willing to lose into the micro account. In this way, the rest of your capital is safe.
It's possible to generate a six-figure annual income trading a single currency futures contract, and I'm pretty sure the intraday margin to do that is less than $10,000. Larry Williams turned $10,000 into $1,000,000 in 12 months in a futures trading contest, then 10 years later his teenage daughter did the same thing using his strategies. This tells us that chances are you're focused on, and trading, a possibility not a plan. Do you have a detailed written trading plan based on 6-12 months of research and testing, followed by 3-6 months of trading it successfully in a simulated account? If you do, then you know what your average daily profit is likely to be and how much capital is necessary to achieve it. You'd also know whether a day (or two or more) of losses is normal within the scope of your plan, or whether these losses are the result of violating your rules. To me, the only reason you'd preface the report of a losing day with "Confession" would be if you didn't have a plan against which to compare your daily results or if you violated your rules. Since you either don't have a proper trading plan or you're violating your rules, your chance of any sort of success isn't looking too good at this point. I met a trader who did his year worth of research, study, testing, and simulated practice. When he finally went live he produced a 3000% return in two years on starting capital of $500 trading Forex. My answer to the title of your thread is "everything is wrong with your way of thinking".
Szeven proved this on the p/l thread for a few years in a row. I believe emg is correct when he states that a PHD may give you an edge in corporate finance, but if you know what you are doing, you can start with a very small amount of cash and make it happen as a day trader. Don't get me wrong. The math is sound, but in practice, it is extremely difficult. And, again, as much as I hate to give emg credit, he is correct. The odds are stacked against you. But you can make it happen. You really can.
Lot's of assumptions. Actually, the loss was no greater that what was planned. I entered, set a stop, and exited the trade accordingly. My interpretation of the news event ( US job numbers ) was incorrect. I considered that number less than brilliant and expected the job numbers to drive the usdollar CFD down. It didn't work that way. It hit my stop and then settled back to within $17 of my entry. My confession shows honesty.
I have to agree with this, as well. I think you are limiting yourself when you shoot for a daily goal. What about that inevitable shitty day, when you grind and grind, and nothing is there, so you dig yourself into a hole? And what about that day where there is 10k just sitting on the table, waiting for you to take it, but you stop at 150 bucks? The big days happen. Don't limit yourself.