Pros been doing a pretty good job so far
The goal with trading with space is to trade at your accounts maximum lotsize. Safely.
ie a 500 account at 100:1 leverage give you 0.5 lots (roughly).
If you have 2% risk (ie 10) risked over a 10 pip stop is only 1/pip or 0.1 lots... youd need to risk 10% to reach maximum lotsize with a 10 pip stop. Its just not safe.
I'll now mention explicitly the concept of the account ledger, which is related to Space.
Most traders think of the account only as equity, and risk a portion of that. This means that, in actuality, their entire account is at risk, albeit in thin slices. They limit their risk in this way, which also limits their lotsize.
So in this concept (not new, hinted at in many posts) ones account is separated into two pieces, by this formula:
E = L + R
Equity = Leverage + Risk
in our quick example
500 = 490 + 10
and yields the maximum lotsize of the account (ie 0.49)
now the cool bit
when you have a win you add it to the R side of the ledger
so if I continue the example of $10 risk 10 pip stop = 0.1 lots
a trade is made for +15 the ledger becomes
490/25
and the next trade can be made at 0.25 lots
another trade is made for +25, the ledger becomes
490/50
lotsize is now 0.5, which is the account maximum...
another trade made for +50
490/100
now you can move money from R to L
540/50
and now you have no risk at all... your equity is safe.
Now I can be much more agressive than before, without getting stressed.
this should illustrate one power of this...
the next is that Space doesnt use a stop. It uses an I/T, and you never allow your risk to be destroyed in one go.
There is an element of delayed gratification that leads to much greater rewards than any other method Ive come across.
Not to mention contracting space on the way to bigger targets, enlarging your lotsize, and all those other cool space trick
G.
