Comagnum...do you have more of an edge than just the risk management aspect? ____________________________________________________________________________ Yea, I have my share of edges. But the edges in and by themselves are of little value without a strong defense - which is risk mgmt. "And then at the end of the day, the most important thing is how good are you at risk control. Ninety-percent of any great trader is going to be the risk control." Paul Tudor Jones (Self made billionaire, from floor runner to Forbes #125 wealthiest)
Agree...it takes both. When I figured out risk control, I quit losing money and made modest profits. As I discovered more effective edges over time...I made the journey from modest profitability to effectively making a living. So, in my opinion/experience...the big bucks are made with edge in timing entries to high probability of a "price run" and of course getting out before overstaying my welcome, but R:R isn't my first priority.
Most professional traders use leverage, or did when starting out. As a matter of fact, not using leverage would be a huge mistake for many winning traders and hedge funds. Leverage is one of a handful of reasons to join a prop firm. Certain areas of trading can not be done as well without leverage, such as market on open orders or pair trading. All of this said, improper risk management or lack of edge (sometimes both) are key reasons why traders blow up. Longterm Capital used leverage that was not reasonable and blew up- even though they were quarterbacked by a room full of experienced people with IQ's above MENSA. If one is unsure, it is better to error on the side of caution. Part of winning is surviving the game durring adversity.
Most leave ET because, as you say, they lost all their money. However, some leave when they become highly profitable. It is partly a time-efficiency thing and also they have developed a private network of other winners. Elitetrader members are lucky when winners like Lescor and Xela post for years.
The OP's question will never get one to profitability. As a possibility, ask a better question to get better answers to make better choices. An alternative form of the question might be, "What did you focus upon that made a difference for you to improve at _______?" The questions we ask ourselves control the focus of our thoughts which makes us feel a particular way and hold our body in a particular state. It's a loop that also works in reverse. If one changes their body's particular state, it changes the background of emotions as well as creates space to think differently. It's the distinction between HAVE, DO, BE and BE, DO, HAVE. Being is in the present moment. Most folks spend their present moments either in fear of the past repeating itself or in anxiety about a fantasy based future. Your current beingness frames the thoughts and emotions by which your actions arise. To answer the question I infer you asking, for me it was annotating and logging bar-by-bar by hand after I got the above sorted out. For it was getting the above sorted out that led me to the correct answers I was seeking. All in all, if whatever path leads to you trusting yourSelf more, than it is the right path.
Last sentence says its all. All big whales and sharks move the market to squeeze out leverage traders. And the more funds you borrow to enter the position the less is swing magnitude needed to eliminate you.