Is it really possible to make money in this trading lark?
Why would I only risk between £500-1,000 if my capital is £50,000? If I have a 100% return on the trade my funds have then increased by 1 - 2%, that is not good trading. Those that then have a 40% strike rate or less are doomed to failure before they even start. I have heard some call this good money management but that isa only for those that are in the markets to survive. They could achieve the same in fixed income with less stress and risk.
A man who risks between 5 -10% of his capital per trade can also easily manage risk. I would go as far as to say there is a high probability that he has to be better at managing risk because it does not take too many losers before he finds himself in serious trouble.
The beauty of the markets is the diversity of strategies, the best are the ones that produce returns year after year.
A man who risks between 5 -10% of his capital per trade can also easily manage risk. I would go as far as to say there is a high probability that he has to be better at managing risk because it does not take too many losers before he finds himself in serious trouble.
The beauty of the markets is the diversity of strategies, the best are the ones that produce returns year after year.
juanbyte said:
Simple because good trading is always about managing risk and if you can risk zero while having unlimited upside reward then this is true nirvana.
It's subtle points like this that all you hotshots should start to understand
As for the 1% that I'm always going on well that's a pretty good industry standard, of course though nothing is written in stone.
Assume though you have 2 money managers trying to seek investors. One says in his memorandum that he's going to risk between 5-10% on every trade (but he'll likely make a fortune in profits). The other one says he's going to risk between 0.5% - 1% and profits are likely to be 'slightly' above the industry average.
Guess which one the smart money investors will back every day of the week, yep the lower risk guy. In fact it's unlikely that the high risk guy will even be let in the door of many establishments so he cries himself to sleep every night and cannot understand why everyone has turned down the potential to 'make a fortune'.
Reason, it's not about making money, it's about managing risk.
LION63 said:
See what I mean about people having no idea that the game is about risk management. To them it's all about maximising profit and to hell with how much is risked to make it.
Well here's an idea to get the max profit from your next trade - put 100% of your available capital on it :cheesy: :cheesy:
I love the way he chucks out the phrase 'if I have a 100% return on a trade' as if they're so common you can pluck them from a tree like apples in season.
In intraday trading, a 100% return on an individual trade is fortunately very common, otherwise intraday trading wouldn't produce reliable profits or (in my case anyway) a way to make a good living. To take a not necessarily exactly realistic example just to illustrate the point, if every trade you do has a 35-pip stoploss and a 35-pip "take profits", allowing for dealing costs, then every successful trade produces a return of 100% in that what's returned as profit is what was risked. But it's obviously and undeniably also true that, measured this way, a 100% loss is unfortunately very common too. But please don't deride people for referring casually to trades with 100% return. In practice, many intraday traders must manage more than that, and regularly, to be able to make a living at all!
Strategic Trader
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the ability to trade and derivatives leverage offers the opportunity for substantial returns
If one is unable work out what a 100% return on a trade is, how can one claim to be trading? Anley, I must say that you are a very clever individual. Managing risk you say, some of us are here to make money, you on the other hand would be well at home in the City fleecing the widows and orphans with your sky high fees and mediocre returns.....Playing games with their money.
longshot666
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AS PREDICTED, when it comes to put up or shut up time, they RUN RUN RUN
I hope this is all the proof anyone here needed that yet another newbie is blowing smoke.
Why wouldnt mr 91% just take the tiny effort required to shut us all up and post some realtime trades? Hmmmmmmm???
I should be on that show "Myth Busters", because I just busted yet another one
As I predicted, all talk and no action
I hope this is all the proof anyone here needed that yet another newbie is blowing smoke.
Why wouldnt mr 91% just take the tiny effort required to shut us all up and post some realtime trades? Hmmmmmmm???
I should be on that show "Myth Busters", because I just busted yet another one
As I predicted, all talk and no action
juanbyte said:
longshot666
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100% correct anley. Painfully obvious they havent a clue what risk management is about. You might as well get a stamp on your forehead that says "future blowout".
Look everyone!, I cant bet HUGE per position according to this formula. Neeto! Notice they never talk about the drawdowns they will get by doing this. How many do you think can handle a 50% drawdown, 70% 90%???
If you use the maximum value in the Kelly formula, you will have extremely painful drawdowns that the vast majority of people could not psychologically handle.
The fact is, the Kelly formula is only a starting place. That is what makes it so painfully clear these guys dont have a clue. They have barely touched upon risk management. They rather talk about mythical 400,000% returns, and 91% wni rates, and when you challenge them, they run and make excuses.
Look everyone!, I cant bet HUGE per position according to this formula. Neeto! Notice they never talk about the drawdowns they will get by doing this. How many do you think can handle a 50% drawdown, 70% 90%???
If you use the maximum value in the Kelly formula, you will have extremely painful drawdowns that the vast majority of people could not psychologically handle.
The fact is, the Kelly formula is only a starting place. That is what makes it so painfully clear these guys dont have a clue. They have barely touched upon risk management. They rather talk about mythical 400,000% returns, and 91% wni rates, and when you challenge them, they run and make excuses.
anley said:
longshot666
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Here is a primo example of someone being misled by people who dont have a clue.
The kelly # is the MAXIMUM value you should use and still have a good probability of not having a complete blowout, but it tells you NOTHING else. They Kelly formula is also only one of many risk of ruins formulas.
When you increase your percentage per position, your maximum drawdown will also increase.
If you have NO IDEA, what effect on your equity curve increasing this value will have, then you should not be increasing it. Further, you should not even be trading in the first place!
If you want to lose tons of money, listen to guys like these and bet big.
The kelly # is the MAXIMUM value you should use and still have a good probability of not having a complete blowout, but it tells you NOTHING else. They Kelly formula is also only one of many risk of ruins formulas.
When you increase your percentage per position, your maximum drawdown will also increase.
If you have NO IDEA, what effect on your equity curve increasing this value will have, then you should not be increasing it. Further, you should not even be trading in the first place!
If you want to lose tons of money, listen to guys like these and bet big.
Roberto said:
Strategic Trader said:
Stategic you forgot to add this 'AND offers the opportunity for substantial LOSSES'
You're making the same mistake as most of the other guys in thinking this business is all about profits when infact it's all about RISK ADJUSTED PROFITS, ie how much you risk for a given return.
No need to trade big chaps, just continue trading 1- 2% of your capital and receive pedestrian returns. I do not suppose you would like to share your personal trading data with us, I promise we will not laugh at the pathetic achievements or the fact that you probably trade once a month risking 0.25% of your capital as you cannot bear to lose. We will overlook the fact that the bulk of your profits year to date is down to the interest posted to the account by your broker.
Heaven forbid that you were to make any real money in the future, you would probably have a seizure.
Heaven forbid that you were to make any real money in the future, you would probably have a seizure.
longshot666
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Just when I thought you could not prove yourself more clueless, you post something like this.
I trade equities. Did it ever occur to you that maybe I use 100% of my trading capital, spread across 100 trades a day on average, while only risking 1% per trade???
Professional traders know that if you have enough signals to spread your capital across, you can have the luxury of only risking 1% per position, while at the same time making 100% of your capital work for you every day.
The effect this has on equity curves is incredible. Smooth equity curves with very low drawdowns. But of course, I wouldnt expect someone who advocates taking on such huge risk to be aware of any of these methods.
As anley already states, people who focus on optimizing returns without taking risk (and drawdowns) into account are obvious rookies.
Once again, claims of mind reading and fabricating things you have no evidence of. Just more of the same.
I trade equities. Did it ever occur to you that maybe I use 100% of my trading capital, spread across 100 trades a day on average, while only risking 1% per trade???
Professional traders know that if you have enough signals to spread your capital across, you can have the luxury of only risking 1% per position, while at the same time making 100% of your capital work for you every day.
The effect this has on equity curves is incredible. Smooth equity curves with very low drawdowns. But of course, I wouldnt expect someone who advocates taking on such huge risk to be aware of any of these methods.
As anley already states, people who focus on optimizing returns without taking risk (and drawdowns) into account are obvious rookies.
Once again, claims of mind reading and fabricating things you have no evidence of. Just more of the same.
LION63 said:
How ridiculous does it get? You must be a fund manager in disguise....."100% spread across 100 trades." No wonder you cannot see how other people make money; if that had come from anyone else I would have laughed but from you it is to be expected. You require serious help as you cannot seem to resist the temptation to trade.
100 signals all at once? What are you following, global stock markets; Russell 2000? It says a lot about your trading methods when you need to open so many positions at the same time. Talk about spreading yourself thin. You are 1 in a million and I take my hat off to you. I see why you call yourself Longshot666.......
You have some nerve I will give you that, you have a lot of cheek to go with it as well. Call yourself a Trader? After what you have said, who can dispute that.
On a more serious note, kindly tell me who your broker is, I need to buy some of their shares.
100 signals all at once? What are you following, global stock markets; Russell 2000? It says a lot about your trading methods when you need to open so many positions at the same time. Talk about spreading yourself thin. You are 1 in a million and I take my hat off to you. I see why you call yourself Longshot666.......
You have some nerve I will give you that, you have a lot of cheek to go with it as well. Call yourself a Trader? After what you have said, who can dispute that.
On a more serious note, kindly tell me who your broker is, I need to buy some of their shares.
Get a life
Before someone calls me a newbie, I have been around the block many times including three real bear markets. You guys must have missed some opportunities whilst arguing as to who is right. The fact is unless you can put up then perhaps it time to shut the shop. If anyone has a system that makes winning trades 9/10 then we would all like to here about it. So do as the man says, tell us when you enter and exit and we will all give praise. I know very few who make money trading unless the market is trending positively/negatively and then it doesn’t take a genius. Even then most get carried away with their success and lose it all, unless of course they only talk about it and then they never lose. Would you guys look at the following and tell me what you think, not exciting I know, but it only takes thirty seconds a day.
FTSE Trades 48 months
Total Points Profit 3919
Total Points Loss 1904
Total Trades 31
Total Wins 23
Win % 74.19%
Max Win 258
Max Loss –300 = 5% of trade as stop loss
Average Win 70.39
Average Loss -238
Pts per Month 42
Max Drawdown 539
Max consecutive losing trades 2
Max consecutive winning trades 6
Before someone calls me a newbie, I have been around the block many times including three real bear markets. You guys must have missed some opportunities whilst arguing as to who is right. The fact is unless you can put up then perhaps it time to shut the shop. If anyone has a system that makes winning trades 9/10 then we would all like to here about it. So do as the man says, tell us when you enter and exit and we will all give praise. I know very few who make money trading unless the market is trending positively/negatively and then it doesn’t take a genius. Even then most get carried away with their success and lose it all, unless of course they only talk about it and then they never lose. Would you guys look at the following and tell me what you think, not exciting I know, but it only takes thirty seconds a day.
FTSE Trades 48 months
Total Points Profit 3919
Total Points Loss 1904
Total Trades 31
Total Wins 23
Win % 74.19%
Max Win 258
Max Loss –300 = 5% of trade as stop loss
Average Win 70.39
Average Loss -238
Pts per Month 42
Max Drawdown 539
Max consecutive losing trades 2
Max consecutive winning trades 6
longshot666
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You really need to learn to read properly. I said MAYBE I do so and so...blah blah....
I used an extreme example of what I do to make a clear point. One that you missed anyway. One that proves you have no idea about the techniques professional traders use to help manage their risk.
Where did you get that silly idea from? Ive seen plenty of other traders make money, I just havent seen any of the story tellers HERE make money. Big difference. Im quite aware of several methods that professionals use to make money. Im also quite aware of standard methods professionals use to manage risk, and its painfully obvioius you are not aware of these methods, and barely know anything about risk control. I can therefore conclude, you are a very green trader.
Really? What does it say? Maybe it just says I have enough systems that I have the opportunity to take many profitable signals a day? Who is the more succesful trader, one who can only find 1 profitable signal a day, or one who can find 100? Your logic is truly limiting. Like you said, think BIG and maybe one day you will have the skills to find 100 profitable signals a day. That said, this was a hypothetical example to show a common method of managing risk by spreading your bets around. I never actually said I take 100 signals a day, but then again, thats your reading comprehension problem. My systems typically take anywhere from 0 to 20 trades a day.
Every post you make you just make it more obvious how ignorant of professional trading methods you are. Personally, I would stop while you are behind if I were you.
I used an extreme example of what I do to make a clear point. One that you missed anyway. One that proves you have no idea about the techniques professional traders use to help manage their risk.
Where did you get that silly idea from? Ive seen plenty of other traders make money, I just havent seen any of the story tellers HERE make money. Big difference. Im quite aware of several methods that professionals use to make money. Im also quite aware of standard methods professionals use to manage risk, and its painfully obvioius you are not aware of these methods, and barely know anything about risk control. I can therefore conclude, you are a very green trader.
Really? What does it say? Maybe it just says I have enough systems that I have the opportunity to take many profitable signals a day? Who is the more succesful trader, one who can only find 1 profitable signal a day, or one who can find 100? Your logic is truly limiting. Like you said, think BIG and maybe one day you will have the skills to find 100 profitable signals a day. That said, this was a hypothetical example to show a common method of managing risk by spreading your bets around. I never actually said I take 100 signals a day, but then again, thats your reading comprehension problem.
My systems typically take anywhere from 0 to 20 trades a day.Every post you make you just make it more obvious how ignorant of professional trading methods you are. Personally, I would stop while you are behind if I were you.
LION63 said:
longshot666
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Dont hold your breathe. As I prediced, they ran away the moment you ask them to post real time trades, even though it would trivial to prove us all wrong very quickly with a 91% win ratio. Speaks volumes. Enough said.
As for your numbers....
Your average win per trade is +74, and avg loss per trade is -238???
Did you mean avg win of 703.9 maybe???
If that is not a typo, even with a 74% win rate, this system will lose money over the long run, since you have a negative expectancy.
As for your numbers....
Your average win per trade is +74, and avg loss per trade is -238???
Did you mean avg win of 703.9 maybe???
If that is not a typo, even with a 74% win rate, this system will lose money over the long run, since you have a negative expectancy.
Kenel said:
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anley
it maybe a mistake for me to post on amateurs forums, but in general i dont make mistakes
it maybe a mistake for me to post on amateurs forums, but in general i dont make mistakes
