Thanks for the advice split. Id rather think big and learn big, taking hits along the way than place £10 per point here and there. Its a big loss but the learning curve is tenfold than just learning from a £250 loss. I'll be back, and il get my money back
pboyles, i have made an enquiry regarding that but arnt expecting any substantial reply. It was peculiar tho in my view. Im sorry but i cant agree with the comment that sb firms dont move price. Time and time again you hear of people who continuously get frustrated at getting their stops hit all the time, which is why i dont use them. Sb firms themselves open positions in markets to hedge against potential losses, that in itself influences prices. This may sound a bit daft, but iv never really wanted for anything expensive in life, flashy cars, big houses, holidays every few months etc, and only ever saw the account reading '£25,000'. It was just a figure - i had no rush to want to withdraw it and 'realise' the profits because i have always been comfortable living within my means. Im a little frustrated at the term 'gambling' as a couple have mentioned, as i have actually done considerable study before i started trading. I suppose trading without a stop loss is exactly that tho, gambling ! This was a one off trade that went wrong and cost me, but its a lesson learnt. This particular trade did go where my study indicated it would, I take a lot from that, but I failed to recognise the pace of the move, and didnt allow for a 'breather' during strength in the market. People have lost a lot more than this, which is pennies in the real world. I also think excitement played more of a role in the trade than what it should have, due to the confidence i had in the trade, but again a lesson learnt. Good to hear some feedback tho and some fair points taken on the chin !
I keep seeing this, but what's so special about 2%?
Guys above thanks for the comments, one of those things, i am gutted but i know i will learn from it.
This topic hasnt really gone into anyones trading 'skillz' either.
Aren't you a smart monkey. It's funny how someone can't make a thread without it being brought back as an insult. You don't even know what's happened the last 2 months and you think you can use that against me. Don't worry, I was fully prepared for someone to try take the higher ground with that.
Go back to your 2%/trade, 2:1 R:R crap and see where that gets you :lol:
Joe, just to remind you, this was about one trade. So 'when hes winning when hes losing' etc does really fit in. This topic hasnt really gone into anyones trading 'skillz' either.
Trading skills are a personal way of trading and all of us are different, There is no-one who can criticise another's methods,really, although we all enjoy ourselves trying! There are so many timeframes, patterns, etc. Even fibs, which I do not use, are all different and everyone has opinions on which is the right place to put them.
This is quite different from managing one's account. My beef at you was not how you should have played your trade on Aug 23, but the manner in which you staked everything on a high stake play. You must always make sure that you can trade several times, in case you lose. Everyone loses, BTW. Where would we all be if we traded like you?
NOW, lets say you wanted to buy a 3x ETF of Financials (FAS) and bought $10,000 worth at $14.50 with a stop at $11 becuase it is more volatile. You now have $3.50 at RISK/SHARE. Since (AS YOU SEEM TO RECOMMEND) you bought $10,000 worth that is $10,000/($14/share) = 714 shares. If your stop loss is hit you lose 714 shares * $3.50/share = $2499, or ~ 2.5% of trading capital.
That should clarify how VOLATILITY, STOP LOSS, and NUMBER of SHARES effect your capital at risk. You should calculate the stop loss distance from the buy price (say for example $1) and % of capital you want to risk per trade (say for example 1% which is $1000 in a $100K acct) and then divide the capital at risk ($1000) by the stop loss ($1)to give the numbe of shares to buy (1000 shares). THIS IS HOW POSITION SIZING IS DETERMINED and RISK IS LIMITED!!! Anyone not familiar with this concept should read Dr. Van Tharp's books ASAP!!
Just bolded 2 things.
1.) I said nothing of the sort. I posed a question about which trade is more risky when I gave some % figures. At no point did I specify what our actual risk on the trades would be and at no point did anyone ask.
2. ) Van Tharp?!?Get real.....the guy's not even a trader. He makes his money packing people into conference centres and selling books about trading!
Theres a number of things to take from this but il be going back to the drawing board. Clearly risk management being one of them !
This is basic stuff that ANYONE trading should comprehend.