He will go bust because you can't risk 1% to make 25% time and time again. OK I doubt that these are the figures but you get the point.
Reward is ALWAYS a direct result of risk. You want to make big returns then you'll have to risk big. 154% in my book is a very very large return in a year let alone a week and it is impossible to get those sorts of returns over time (or even 25% of them) without risking a crapload of your account. Therefore there will be a time in the future when you get a trade very wrong, perhaps more wrong that you thought and so you account will gone.
It really is as simple as that and people who think they can make big money while risking a pittance will always end up disappointed at best and broke at worst. This is over time I might add, not on a few trades.
By the way the answer to my question that I posed earlier is to ask another question 'How much money did they both risk in order to make their respective returns'. And 75% of the time you'll find the guy who made the lower returns was the better trader.
Reward is ALWAYS a direct result of risk. You want to make big returns then you'll have to risk big. 154% in my book is a very very large return in a year let alone a week and it is impossible to get those sorts of returns over time (or even 25% of them) without risking a crapload of your account. Therefore there will be a time in the future when you get a trade very wrong, perhaps more wrong that you thought and so you account will gone.
It really is as simple as that and people who think they can make big money while risking a pittance will always end up disappointed at best and broke at worst. This is over time I might add, not on a few trades.
By the way the answer to my question that I posed earlier is to ask another question 'How much money did they both risk in order to make their respective returns'. And 75% of the time you'll find the guy who made the lower returns was the better trader.
over a 2 yr period?...........i think u r wrong cos 2 yrs is a long time and if a trader has high returns over such a long period.....his consistency of high returns over such a long period must surely mean he is a good trader unless u r using a diff criteria to judge them which can't right since the objective is to make profits relative to capital. A good trader is not neccesarily the best technical analyst or theorecian but the person who can execute properly in reality based on their convictions................
donaldduke
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Basically a trader that make 10% a year but draws down only
1% is considered better than than a trader who makes 100% a
year and has draw downs of 20%.
Therefore anleys question was a bit incomplete because he
didnt tell how much the each trader varied %wise month on
month.
1% is considered better than than a trader who makes 100% a
year and has draw downs of 20%.
Therefore anleys question was a bit incomplete because he
didnt tell how much the each trader varied %wise month on
month.
Jaytrade
As stated in my original post the purpose was just to show newbies that it is possible to make money daytrading via spread betting.
I have a CD of a seminar in which an expert says it is impossible to make money daytrading via spreadbetting because the spreads are too wide.
This is clearly not the case.
The other point I wanted to make is the importance of managing your losses, this is more important than your winners.
There are a few people on this site who are very negative about everything and genuine questions from newbies do not get the answers they deserve.
The first steps board is coming along and is good, there is a lot of good information there.
I am sure there are some people that think that there is only one way to trade, there is a right way for each individual.
There are investors and speculators and each have different goals.
Risk is commensurate with rewards as in DD's post, he thinks the trader who risks less and has a lower return is the better trader.
I just think it is up to the individual.
Are you a Warren Buffet or a George Soros.
Both very wealthy both right as far as I am concerned.
As stated in my original post the purpose was just to show newbies that it is possible to make money daytrading via spread betting.
I have a CD of a seminar in which an expert says it is impossible to make money daytrading via spreadbetting because the spreads are too wide.
This is clearly not the case.
The other point I wanted to make is the importance of managing your losses, this is more important than your winners.
There are a few people on this site who are very negative about everything and genuine questions from newbies do not get the answers they deserve.
The first steps board is coming along and is good, there is a lot of good information there.
I am sure there are some people that think that there is only one way to trade, there is a right way for each individual.
There are investors and speculators and each have different goals.
Risk is commensurate with rewards as in DD's post, he thinks the trader who risks less and has a lower return is the better trader.
I just think it is up to the individual.
Are you a Warren Buffet or a George Soros.
Both very wealthy both right as far as I am concerned.
Showing newbies it can be done, and Newbies ACTUALLY doing it are two different things. Lets get that distinction clear.
I scalped 7 trades tonight on DOW SB for 12 points total ( not a lot) but for a 6% gain. Had I been able to trade all day, I would have gained over 50%.That was for a 0.5 % risk per trade.Half the risk that Juan has taken.Two trades were break even. I do not advocate anyone does this, as the risk is very,very high. As Juan says, killing losses plays a big part in the picture. Clearly, from the above, just a 10 point move against you + spread+ bias and you're 20 + points down- a 10% loss, in case you can't work that out! Multiply that by the 7 trades I took and that = 70% loss- almost wipeout( theoretically). You can't in practise, because you won't have the margin to carry on.
If you can catch the ton moves, that will undoubtedly boost your account and give you a bit of leeway ( so long as you get the ton first!!!) but you had better watch the losses....because they will crucify you. A 20 point win will probably take you 10 times as long to achieve as suffering a 20 point loss. Whovever said "life is short" was not wrong....
I scalped 7 trades tonight on DOW SB for 12 points total ( not a lot) but for a 6% gain. Had I been able to trade all day, I would have gained over 50%.That was for a 0.5 % risk per trade.Half the risk that Juan has taken.Two trades were break even. I do not advocate anyone does this, as the risk is very,very high. As Juan says, killing losses plays a big part in the picture. Clearly, from the above, just a 10 point move against you + spread+ bias and you're 20 + points down- a 10% loss, in case you can't work that out! Multiply that by the 7 trades I took and that = 70% loss- almost wipeout( theoretically). You can't in practise, because you won't have the margin to carry on.
If you can catch the ton moves, that will undoubtedly boost your account and give you a bit of leeway ( so long as you get the ton first!!!) but you had better watch the losses....because they will crucify you. A 20 point win will probably take you 10 times as long to achieve as suffering a 20 point loss. Whovever said "life is short" was not wrong....
As with any approach what matters is what is right for the individual not the group.
The lower the risk the better chance of survival.
Any strategy must be backed up by a complete trading plan that incorporates risk, money management, discipline ete etc etc.
As for results from a specific system it is also about knowing the instrument/s you are trading and your research into your system and your ability to apply it. If you have already established through your own testing of actual trades over a good period that your expectation from this system is a good one then you have something to offer. If you have not tested it through trading over a longer term then while your present results are encouraging it remains to be seen that this system will produce good results over time. However I wish you well and I also agree profits can be made from SB its only scalping of 1 or 2 points a deal that is foolhardy to attempt.
The lower the risk the better chance of survival.
Any strategy must be backed up by a complete trading plan that incorporates risk, money management, discipline ete etc etc.
As for results from a specific system it is also about knowing the instrument/s you are trading and your research into your system and your ability to apply it. If you have already established through your own testing of actual trades over a good period that your expectation from this system is a good one then you have something to offer. If you have not tested it through trading over a longer term then while your present results are encouraging it remains to be seen that this system will produce good results over time. However I wish you well and I also agree profits can be made from SB its only scalping of 1 or 2 points a deal that is foolhardy to attempt.
donaldduke
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Chartman,
Why was your gain 6%. And how was your risk only 0.5% per
trade? Do mean 0.5 gain per trade?
Why was your gain 6%. And how was your risk only 0.5% per
trade? Do mean 0.5 gain per trade?
donaldduke
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Thanks for clearing that up..
Is this how you normally trade or were you trying to replicate
juanbytes style..
Is this how you normally trade or were you trying to replicate
juanbytes style..
I'm not trying to replicate Juan, just helping confirm a point that you can win on SB. Juan has a particular trading style that doesn't suit my personality. No doubt, my style doesn'st suit him. I 'm happy to take 20 point pullbacks,mostly. So no, It's not how I normally trade.
Hypothetically, what if he had made such returns swing trading, would u guys have had a different impression since that form of trading is considerably less risky? I just get the impression u r looking at it from a day trading perspective (i know it was Dow daily).
Zenda
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Is this the theory??
Chartman- Is this what they are gonna learn on your Seminar? - Is this the "New Dow Theory" thats gonna cost over 200 quid to learn - Scalping for a point!! without a live trading platform!! If you don't trade that way - why do it! or tell others!! - Are they going to learn your style (as you said it wont suit others) or is it all about the 20% Pullback Theory ?? Just some passing thoughts!!.........
Chartman- Is this what they are gonna learn on your Seminar? - Is this the "New Dow Theory" thats gonna cost over 200 quid to learn - Scalping for a point!! without a live trading platform!! If you don't trade that way - why do it! or tell others!! - Are they going to learn your style (as you said it wont suit others) or is it all about the 20% Pullback Theory ?? Just some passing thoughts!!.........
Mr. Charts
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The concept that large reward requires large risk does not apply to many trading methods.
Serious options traders have minimum risk for potentially large reward, but since I no longer trade options I'll leave others to comment if they so wish.
My own US intraday trading is based on minimum risk and maximising reward. I'll enter many positions with a risk of 5 - 8 cents, sometimes the reward is only 15 - 30 cents but often turns into 100 - 120 cents. Certainly that appears a risk/reward which is virtually "off the scale" to the mindset of most traders, but I, and many others, do it every day. What is more, it is done with a high percentage hit rate - it is NOT a matter of lots of small losses and a few large gains, it is about reading the market properly, minimising risk, and then very good position management producing a few losses, a few scratch trades, and many profitable ones ranging from small to very large rewards.
Serious options traders have minimum risk for potentially large reward, but since I no longer trade options I'll leave others to comment if they so wish.
My own US intraday trading is based on minimum risk and maximising reward. I'll enter many positions with a risk of 5 - 8 cents, sometimes the reward is only 15 - 30 cents but often turns into 100 - 120 cents. Certainly that appears a risk/reward which is virtually "off the scale" to the mindset of most traders, but I, and many others, do it every day. What is more, it is done with a high percentage hit rate - it is NOT a matter of lots of small losses and a few large gains, it is about reading the market properly, minimising risk, and then very good position management producing a few losses, a few scratch trades, and many profitable ones ranging from small to very large rewards.
Attached is a word.doc which should help most newbies & probably some seasoned traders
It's part 1 of a free ten section trading course so I'm sure I'm not causing any infringement of copyright etc. The others can be downloaded by anyone themselves & I posted the link on another recent thread.
Rgds.
Mike
It's part 1 of a free ten section trading course so I'm sure I'm not causing any infringement of copyright etc. The others can be downloaded by anyone themselves & I posted the link on another recent thread.
Rgds.
Mike
