TheRumpledOne wrote:Jalarupa wrote:
Your next trade is now 1.34% over three lines... So your lot size automatically increases but your risk remains relative to the initial 1%...
That is where I get "lost".
Are you saying you exited trade #1 with a profit?
Then your next trade you increase you lot size to include the trade #1 profit?
Then if you lose (stop out), you lose the trade #1 profit plus the initial trade #1 risk?
If this like letting it all ride at the craps table?
I think it means that your risk box now is 1,34% but if you risk a portion of the total risk (i.e. one line) and not all of it then losing the next trade would be:
(2/3)0,44% = 0,29% per line, where 0,44% is 1,34/3lines.
So yes, now your risk box is 0.87% of your account aka you are down of 0.13%.. BUT you was risking the 0.44%!!
The more you accumulate and normalize the smaller the 'loss'. At some point you'll find that, if you consider a loss the TOTAL loss of your risk box (1%), then all the "losses" before that moment are just fluctuations.