Under-capitalisation

you seem like an all round good egg. it was nice to have met you. i hope you make lots of money.
 
If you're risking 1% and making several trades a day, lets say R:R of 1:1, and win % of 55%, then making 10 trades a day, you can expect on average to make 1% a day (what you risked). For those that can handle 2%, you could make 2% a day average. And those numbers are not out of the realms of possibility. There will be people with much better expectancy than you'd get from 1:1 and 55% win rate.

As for the 500 to millionaire. Well you can't argue with the numbers that it is possible, but look at how long it takes to get from 500 to 5000. Wouldn't it be better to just save a lot of that trading time, by working and saving the 5000? Making 1-2% a day still takes quite a while to get from 500 to 1000. But you could get 500 quid for a weeks work. Spend an entire month or more trading to get to 1000 and onwards, or work one week and have a better trading account.
 
Shakone said:
If you're risking 1% and making several trades a day, lets say R:R of 1:1, and win % of 55%, then making 10 trades a day, you can expect on average to make 1% a day (what you risked). For those that can handle 2%, you could make 2% a day average. And those numbers are not out of the realms of possibility. There will be people with much better expectancy than you'd get from 1:1 and 55% win rate.

As for the 500 to millionaire. Well you can't argue with the numbers that it is possible, but look at how long it takes to get from 500 to 5000. Wouldn't it be better to just save a lot of that trading time, by working and saving the 5000? Making 1-2% a day still takes quite a while to get from 500 to 1000. But you could get 500 quid for a weeks work. Spend an entire month or more trading to get to 1000 and onwards, or work one week and have a better trading account.
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There are certain types of trading methods with a stop of 40 and target of 7 , these make a good return with a the specific method , positive expectancy is positive because there are many more profits of 7 pips then losses.On a 2,000 account one would be risking 2%, with reward of 0.35%,yet this system is highly profitable.
 
I can't argue possibilities of what can and can't make profit oildaytrader. But I wouldn't trade with the kind of R:R you're talking about, because quite simply it wouldn't fit me psychologically. 5-6 winning trades having their profits wiped out by one losing one is not something suitable for me. As long as the expectancy remains positive, then that's enough for profit, but not necessarily enough for personal. I was simply trying to show that 1-2% a day is quite possible, without making unrealistic claims about win % or R:R.

But are those people going to be able to find 10 trades a day?
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Depends. Is it a job, or a hobby after work? If you work from london open to US close, you should be able to find on some forex pairs or the Dow, or Oil etc, 1 opportunity one one of those markets every hour or two, right?
 
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Dunno mate. If we use the 10k account size as an example which gives £100 for 1% then you'd need a stop of say 30 pips wouldn't you? So you'd need to be taking 35 per trade to come out with a 1:1 after slips spread etc.

Since this morning hourly ranges on cable have been 39,65,42,66,63,47 so maybe a few ops to pick up 35 pips there if you can pick tops/bottoms well but how you gonna make up for days like yesterday when numbers come out? You'd be well behind on your trades.

I dunno this just doesn't seem like an approach that would work to me. Not saying it cant I know some people probably trade this way and make good money but I know I could never make it work.
 
I don't understand why you need a stop of 30 pips, or even how that is relevant. You could have a stop of 10 pips, or you could have a stop of 50 pips, that doesn't change anything if you have 1:1 Risk:Reward and 55% win rate. You don't need to take 35 pips, you need to take 30 from entry if 30 is your stop. Besides it was just an example. If you want higher reward to risk, good for you.

Also why would you be well behind on days when numbers came out? You might be well ahead.
 
arabianights said:
Your risk of ruin is essentially 100%... that ain't even a disadvantage, it's a fundamental flaw.
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People wonder why 95% fail , you give them an answer and explanation,they think there is another answer and believe you are totally incorrect.
 
Thanks guys, some interesting replies. So lets say you change from a £500 account risking 2% per trade to a £10,000 account. You use the same setups. Would you change any aspects of your money management? I think we would all agree that it would be wise to risk less % per trade... But would you do anything else such as stepping in entries, averaging in, pyramiding, or some other method that I haven't heard of.... Just curious....
 
Just thought I'd bump this up. Also, does anyone know of anywhere I can demo trade UK shares? Thanks,

Sam.
 
Nobody wanting to contribute to a thread about trading then? Nah you're right, cyber bullying and lulz is much more fun!
 
Why would your strategy change if you had £10k rather than £500? 1% risk is 1% risk whatever your account size and a 1:1 RR is 1:1 RR whatever your account size. I don't see any upside or downside to changing your strategy due to the size of your account unless your account is so big that you move the market every time you open\close a position?

A profitable strategy is just derived from probabilities and probabilities remain exactly the same whatever size you trade (within reason). If you're a winner with £500 then the only thing stopping you from being a winner trading the exact same strategy with £50,000 is your own psychology (fear of losing an amount that means something).
 
LiamH said:
Why would your strategy change if you had £10k rather than £500? 1% risk is 1% risk whatever your account size and a 1:1 RR is 1:1 RR whatever your account size. I don't see any upside or downside to changing your strategy due to the size of your account unless your account is so big that you move the market every time you open\close a position?

A profitable strategy is just derived from probabilities and probabilities remain exactly the same whatever size you trade (within reason). If you're a winner with £500 then the only thing stopping you from being a winner trading the exact same strategy with £50,000 is your own psychology (fear of losing an amount that means something).
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Give the man a prize...
 
LiamH said:
Why would your strategy change if you had £10k rather than £500? 1% risk is 1% risk whatever your account size and a 1:1 RR is 1:1 RR whatever your account size. I don't see any upside or downside to changing your strategy due to the size of your account unless your account is so big that you move the market every time you open\close a position?

A profitable strategy is just derived from probabilities and probabilities remain exactly the same whatever size you trade (within reason). If you're a winner with £500 then the only thing stopping you from being a winner trading the exact same strategy with £50,000 is your own psychology (fear of losing an amount that means something).
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Trade a live account with $500k and see your discipline go on money management.Just cause you trade a small account , you might be disciplined.Try putting two beavers on your lap and try resisting and saying no.
 
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