shadowninja
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Yep, one thing I noticed with the Market Wizards interviewees/traders was that most of them had blown up an account or two.
Yep, one thing I noticed with the Market Wizards interviewees/traders was that most of them had blown up an account or two.
The conservative end got capitalised by doing something else before they started trading. If they are like me, they could be on a pension. In my case, I don't need 100% with what I allot to trading. That said, it's a hobby and I really would like to get 100%, just to say that I could.
At present, let me be clear, I can't, not by compounding, which would be great.
I have made 100%, frequently, over the years but I have never been able to sustain the winning streak, which is what it is, I cannot call it anything else. I'd like to be like 4x but I haven't got it, yet.
Lead on! Show me the light! 🙂
If I could add this point. One of the investments that set me off and padded my capital base was an investment in Next PLC. They nearly went down the pan, once, you know. In fact they were a penny share. I didn't go in at that level but I went in low. That is not trading, though. So maybe some should think about that, especially if they are young.
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Are you thinking about locking in with stops and then pyramiding your positions?
meanreversion
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There are many similarities, they all seem to mention 1% per trade as optimal, and they all cut their teeth taking positions in futures based on some fundamental analysis, and promptly losing all their money.
Apart from that, it's noticeable how DIFFERENT their strategies are. Some are trend followers, some are macro forecasters, some scalpers etc.
Like it says in the Van Tharp book, the system you use is 10% of trading success. The rest is money management and psychology.
I think 4xpip is showing us the light at the moment...!
B
Black Swan
shadowninja
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Not even that clever. Ok, I give in. I'll tell you why.
Note that I said "can" in my first post. So, for simplicity and argument's sake, let's assume Daytrader Dave is pretty good at picking a direction but occasionally gets it wrong, say 20% of the time. He has £1000 in his account. 1% = £10.
He's using an Alpari Classic account which allows him to do approx 50p per pip (or in fact he could have an IG Index spreadbetting account).
He trades EUR/USD at current market conditions so no wild 600 pip daily swings like we've seen before. 😆
His system allows him to take on average 2 trades a day and he makes on average (including losses) 30 pips a day using 20 pip stops (because sometimes he'll lose 20 pips, other times he'll make anything between 10 and 100 pips). Seems reasonable?
So, if he doesn't compound, how much will he make in 50 weeks (assuming he has a week off for Christmas and a week off in summer)?
The point is, it is possible even if it doesn't usually happen. I mean, we know that 93%/96%/85.6% of all traders fail.
The other point is, don't be restricted by thinking how much of a return you can get for your capital. For your own specific type of trading, you need to see for yourself what is possible and accept that maybe it is only a 25% return a year or maybe it is 300% return a year. Don't compare your results with anyone else because it can make you take decisions that ruin your account.
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If he makes 30pip/day, that's £15 a day or £3750 a year, hence 375% I think!
I must say getting the direction right 80% of the time would be damn good! for me anyway! I only manage 43% at the moment!
Glad you edited in that last point, prior I thought and...
Now I see exactly what you mean and I see you are right and its worth remembering.
shadowninja
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Sure, I'm usually able to get the direction right when I trade BUT there are many, many days where I don't know, so sit on my hands, which kills the return a bit (as well as the feeling in my hands 😀 ). On those days, I'm not making money, but I'm not losing money. That's the joy of swing trading - 2-3 trades a week is more my reality... but as I say, that's what I can do and that's what I must stick to. I am sure there are Daytrader Daves out there who are raping the market day in, day out. The minute I try to compete with them, I will blow up my account. I've tried it in the past. It's just not for me. I can be my best friend or my own worst enemy.
Example: Monday night, my plan for Tuesday was to wait for a dip in the Euro to buy. I was willing to risk 20 pips. You can see the move was worth 150 pips. (Sadly, I was a lazy ******* and got up at 10am. 😱) I was also looking to sell USD/JPY, which only moved later in the day, so lazybum over here was able to grab a few pips, again, risking just 20. Today, I have nfi, so I'm going to browse forums all day and wait for tomorrow. As I said to someone recently, if you don't see a trade, don't trade; do anything else - read a book, watch a DVD, play a game, go shopping, have a wank but whatever you do, don't trade.
(Hehe. US swear filter?)
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meanreversion
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Well, respect. How long have you been trading?
😱fftopic: 😀
Shall we say that I started well before it went online. I've always bought shares for investment, though.
