There are two ways of managing risk. The first is to use stops, which lowers your win rate because there will be times you'll get tagged and other times you're damn glad you had a stop, or you can use the size of your account. I choose to use the size of my account because it gives me a higher win rate but when I do lose my losses tend to be bigger than I'd like or the drawdown is larger than I would like at times. So it really comes down to this....do you want to bat 65%-70% for example and let your winners go farther than your losers or do you want to bat 90+% and it makes no difference if you let winners run or not but every once in a while you'll get spanked? I don't use the stop method because by nature I'm a profit taker. I can't let profits run to save my life, which is the primary reason I trade futures -- for the leverage on small gains. I can't guarantee my winners will be larger than my losers to a 65% win rate for me may not get it done. I need another tool so I use money management. There are different ways to manage risk but each way comes with a trade-off. Just do what works best for you.
this made me laugh - but maybe you are onto something... maybe that's the reason why you can have more losers and still be perfectly profitable....
no loss no winning! lots of small losers and a few big winners, that is called professional traders. lots of small winners and a few big losers, that is called ametetur traders. kind of paradox
Wrong. Professionals are traders who make money consistently in the market. It doesnt not matter the method. Take profittakingfool for example. He is a professional. He manages more money than probably anyone in this thread. He does the reverse of what you think is "for pros". Thats why you arent a pro. There is no cookie cutter method in trading.
don't the pros have a keen sense on direction? Is'nt that what makes the $$? How good is strict risk and money management without forcasting abilities? I kinda wonder if you just keep randomly entering the market with no direction how well you can fare using strict guidlines.
Have you tried to lose money trading? if you try and you find it difficult to lose, its time to sit down and ponder - what is going on in your head thats removing you from logical thought, and then will come the eureka moment, 99% psychological.
I remember you tried trading on a number of different instruments some time ago. Why did you settle on fx?
For most it's because it requires the least amount of capital to open and trade an account -- which is a shame because the market of stocks in general is easier to trade by far. Struggling traders start with stocks, move to futures when their capital dwindles under 25K, then finally settle for the retail fx pseudo-market where you have the worst conditions stacked up against you.
Yes, if you have an edge, you can have more winners than losers. My win % is 60% with about equal $ for winners and losers.
Referring to my earlier posts I should add that I am a longer-term position trader and my comments were made from that perspective. In day trading breakeven stops may very well be useful, can't say.