Never Lose Again

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MightyOne
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Postby MightyOne » Sat Mar 28, 2009 7:00 pm

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)

AND

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 SUCK :roll:

Just kidding...

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

thoughts


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 :P
More risk equals more risk :shock:

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.

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marcromero
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Postby marcromero » Sun Mar 29, 2009 1:36 am

I'm pretty new to forex so what you are saying is kinda like me reading somehting a lawyer wrote. This question might sound stupip but how do I figure out how much I should risk on each trade. I like low risk but I've been having to risk about 5%+ per trade to make any head way.

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prochargedmopar
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Postby prochargedmopar » Sun Mar 29, 2009 2:44 am

marcromero wrote: stupip


You sound like me, You've got pips on the brain.
:wink:
#1BODY in direction of profit #2INCREASE lot size Obsessively
My Losses cause me Great Laughter!
Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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MightyOne
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Postby MightyOne » Sun Mar 29, 2009 3:37 am

marcromero wrote:I'm pretty new to forex so what you are saying is kinda like me reading somehting a lawyer wrote. This question might sound stupip but how do I figure out how much I should risk on each trade. I like low risk but I've been having to risk about 5%+ per trade to make any head way.


The very first question you should be able to answer is if you can profitably trade Forex.

You should start out trading micro lots for your first 200 trades.

If you are profitable after 200 trades then you risk half your win
ratio divided by 10.
If you are a 70% trader (70w to 30 losses) then you would risk
3.5% of your account at maximum.

If you are experienced in Forex, but have never recorded your
win/loss ratio then it is pretty safe to trade 3% at maximum.

The amount of money that you risk should be based on the highest value that your account has reached (high water mark).

Scaling down (risking less as your account declines) magnifies prev. losses.
If you lose 4% then you need to make 4.16% to B.E.
If you lost 12% of your account then you need to make 13.44% just to break even.

What does this mean to you?

It means that if you lose 30 pips and scale down then make 30 pips you are still sitting with a loss.

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My first day in war

Postby Lanzatrader » Sun Mar 29, 2009 2:08 pm

Hi all... I´ve been reading NLA trhead on Babypips forum since last monday. English is not my native language.. so sometimes it´has been dificult understanding.

These are my entrys on 27th.

I get +89pips with eurjpy, gbpusd and eurusd.

I dont understand Zero lines theory so i only use dragon´s setup.

Image

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Postby marcromero » Sun Mar 29, 2009 2:41 pm

thanks MO that really helps out alot

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Postby marcromero » Sun Mar 29, 2009 3:06 pm


marcromero
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Postby marcromero » Sun Mar 29, 2009 4:07 pm

what is the best timeframe for this indi---TRO_DYNAMIC_FIBS_SR_Trail(newest version)


Are we still using it with the h1(semafor) and m15 combined?

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es/pip
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Postby es/pip » Sun Mar 29, 2009 4:11 pm

marcromero wrote:


posted twice
Last edited by es/pip on Sun Mar 29, 2009 4:13 pm, edited 1 time in total.

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es/pip
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Postby es/pip » Sun Mar 29, 2009 4:11 pm

marcromero wrote:


to me that would be a correct zl--- if you are basing it off the candle i think you are.

that zl would be where the held profit is after the large up bar, so price would have to come back and at least test half of that bar for you to make a dec. on whether to trade it or not


how i see it

wouldn't have had a trade on the 15 but if you go up to the 30m you could have played it like this
Image

Image

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