es/pip wrote:MightyOne wrote:Talking about this trade or that trade is almost a stupid waste of time.
Really it all comes down to how you manage your money.
Again, managing your money is almost all there is to trading.
A very small fraction of your success is based on your technical analysis. I can OOooOOOo you and I can AhhhhAHhhh you, but in the end it is all just money management.
Massive profit does not come from an explosion in price from the point of your entry but from an implosion of risk.
High risk is always paired with low reward (scalp/ish)
Low risk is always paired with high reward.
The first goal is to secure a profit with the highest probability of success and the second goal is to subdivide that profit into two parts
and trade for a large profit with a high risk multiple.
Sure, you can risk 4-5% per trade every trade, but let me ask you:
How many millions do you have?
I know that you place more than 2 trades per day so it stands to reason than you can achieve 50/100/150% per week risking 5% per trade right?
If you don't have millions I can tell you the reason right now:
You are losing too much too often to gain too little.
If you are wrong then you are usually wrong immediately
and if you are right then you are usually right in a big way.
So do your self a favor and use a small position size to
reduce the magnitude of instant loss and and be bold
enough to hold in a big way.
Investing has its place
Trading has its place
Scalping has its place
None are right all of the time
but each is right some of the time
and some of the time is where you make
your money all of the time.
Maybe I need to think about all of this and maybe refine how i am going about the way i risk and target my trades.
I will admit---------- i put on a trade and i risk around 4% and if i have a target i shoot for it if PA turns before it gets there i get out, if it closes against me i get out wherever i can.
I have not traded in the way you recommend-- in building up a small profit on each scalp based on risk and then going for the gusto so to speak.
Friday--us session was pretty choppy and none of my targets were reached----was i up 15-20 pips in some trades---yes--did i make any good money off of them-----no
i adjusted half way thru and started scalping because of the chop----had i scalped and built my risk on each trade i would had obviously done a lot better
My 3-4% is probably different from your 3-4% since my risk is based on high water mark.
It is just some thing you learn over time that more risk does not equal more profit it equals more risk.
More profit equals more profit
More risk equals more risk
Most traders use their win ratio to determine how much risk they
can take on similar to a teenager with a credit card.
I use my win ratio to secure a profit which is then divided into
two (or four) separate trades insuring minimum draw down and thus maximum compound returns.
Holding for hundreds of pips is not worth the
delay in compounding unless:
1. Your risk is very small.
The longer you hold the greater the chance of being zero lined.
2. You got in on a very small stop and the large move offers
the potential to make 20/50/80% gains that you would normally
not be able to accomplish while trying to "unfold" the market.
3. Despite 1 & 2 you should not hold for periods longer than 2 bars of the time frame you are trading; it is important that you rescale
your position size for maximum growth.
The other day the EURUSD fell ~260 pips in a matter of hours giving an account boost of up to 52%.
These massive frog jumps in your account on LOW RISK are what
really get you to where you are going.
In closing I will say that if you are risking 5% per trade then you should at the very least be averaging 25% per week.
If you are not averaging 25% per week then it is because you are
risking 5% per trade.