TheRumpledOne wrote:aliassmith wrote:
I look at it like this...
I come to the markets with $300,000. Now that is my stake and it would be difficult to get that $300k again outside the markets if I have to start again.
I use "safe" risk levels until I get money above what my stake is, which I refer to as OPM. OPM is my money, but I am more liberal with it.
The number 1 goal is to protect my stake so I can stay in the game.
The number 2 goal is to explode profits using OPM.
Did you read any of the material I posted about HOUSE MONEY? Just curious.
The short answer is yes.
Yes trading is a form of gambling. The currency market is a negative sum game after spreads and fees.
Trading in a casino is a negative expectancy game.
In a casino, the law of large numbers suggest that if enough plays are made the house always win, no matter the size of the wager.
In the currency market I can exploit a statistical edge which means I am a positive expectancy trader and exploiting OPM with an actual positive expectancy doesn't apply to the fouled mental math of gambling imo.
Lets say I am a good investor and I make 50% in a year. Now I have OPM. Should I continue to invest the same as I started with or should I increase my position size? Should I reinvest my dividend? Should I never increase my size?