YM what is the absolute max liability one can incurr in?

Cereal · Jul 27, 2011

Quote from Zr1Trader:

You are asking the right questions. In most cases the broker will close you out if your account equity can't meet the current margin requirements but you don't ever even want to let your equity get close to that point or in any danger of getting to that point. In case of a black swan you could still be on the hook and in debt to your broker. eg. limit down markets for consecutive days.

If you are going to trade without stops don't use any leverage or use very very little leverage. eg trade one contract per 60k in your account when trading dow. If you are going to trade with stops make sure to have them at a reasonable level so you aren't losing more than a very small portion of your account per trade eg .05%.. Take volatility into account when placing your stops.

If you are new to trading then don't trade live until you have a thoroughly tested , reliable method which takes into account every last detail . Market screen time and experience are very important. 5k -10k hours of experience is recommended before risking any serious money. In the meantime trade on sim for a long time and then start with 5k-10k of money that you can afford to lose while learning the emotional aspects of trading with real money instead of sim money.

Zr1
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Thanks for this one.
One thing, you are recommending 5K - 10K hours experience of market screen time.
If I take 5K hours, divide it by 6 hours daily, it means you are recommending not to trade in real until I spend 833 days just watching the screen.
I am sure thbe more hours the better, but isn't this a bit too much?

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YM what is the absolute max liability one can incurr in?

Cereal