paweldobkowski wrote:pika wrote:Ultimately you must be able to trade successfully, otherwise your account will be wiped out in no time. Why? You risk 5% for the first trade, but as you build up your acount, you are also increasing the risk with subsequent trades proportionately to the lot size (i.e. 10% on second trade, 20% on the third and 40% on the fourth). The moment you lose in any of the subsequent trades, you are back to square 1.
Besides, how will you manage your acount if it falls below $100? Do you still risk 5% or $5? If you risk $5, that will be more than 5% risk. I would suggest that you manage your trade based on a fixed % stop loss of your equity. In this way, the lot size will adjust itself according to the size of your account and you can last longer in the game. All said, you still must find yourself a winning method, or else it will just be a matter of time before your accound will shrink so small that you only make pennies instead.
Thanks for You input Pika : )
Don't get me wrong. I'm certainly not saying that if You keep losing in the markets You are going to become profitable using this.
The thing that I've showed also was only an example. Im not good enough to risk 5%. My case is that I still cant handle emotions while trading. Im more or less consistent playing small lots though and I wanted to make it my advantage.
The risk that I can accept before putting a trade (which I belive is essential to be profitable) and feel comfortable with is 1% per 10p right now. I put on a trade and I feel like that 1% is gone and I dont care. I feel no stress. I dont hesitate to take any setup I see. I feel fine about getting out with small loss and there are no bad emotions involved. Whats also important I dont rush to get out. I can calmly look how the trade develops. I dont want to go up for 2, 3 or more percent yet therefore I figured out this "trick".
The only good way to test this on me is to play it so today was my first day trying it and it was a pretty good day. It was a first day so I cant say a lot so far BUT I still feel comfortable with risking 1% of my account and after getting first 10p I feel like Im playing for free. Just like in poker when You get someones money it is better to push aggressively with them.
ALSO risking that little I can make 16% in 40p instead of 160p like before. SO YES when I lose at any point Im back to STEP1 but if I make those 40p in any of 4 attempts (before gaining 160p) I still make 16% working less than before.
Hope that it makes sense. Im sorry for any mistakes in my english : )
You say two conflicting things. First, you say you aren't good enough to risk 5%. Later though, you seem confident that in 4 attempts you have no problem winning all of them.
If you aren't good enough to risk 5%, you won't win 4 in a row.
Why not risk the smallest amount you can, and get to a point where you are consistent enough to be comfortable with 5%?