Dislikedargo, you have summarised the process quite well and found the right words. you can only do that if you have experienced it yourself. for a theoretician it is all gibberish and he will not be able to decipher it. by the way, i have come to the conclusion that i need at least $1000, pound or euro to trade 0.01 microlots and be relaxed. or 100.000 for 1 lot. that means no leverage for the first positions. starting with $100 and trading 0.01 lots has a lot to do with luck.Ignored
I have also landed on 1:1 leverage as a comfortable level. Even then though, I feel a little uncomfortable when the price runs a long way against me and I don't get enough hedges on along the way. I think this comes from averaging too close and too frequently though. The way I combat this is by making my average positions further and further out as the price goes against me (obviously this has its drawbacks though). Maybe though my uncomfortableness also comes from many years of risking very small amounts compared to my balance. I think with this strategy you need to get comfortable with a large drawdown and the possibility that you may need to take a large loss at some point (this is ok as you will be winning most of the time, unlike pure directional stop-loss strategies where 55-75% win rate is phenomenal).
I reckon though you could trade this strategy at higher leverage. You would just have to design the averaging/hedging rules accordingly and be willing to close out all positions at a loss more frequently. I will be exploring this more in the future.
Do you still get flat at end-of-day? I do, but I find the time constraint adds complexity so find myself closing out my positions at sub-optimal levels. I don't really see a way around this atm though. I don't see the point of slapping on a complete hedge and starting in the same PL position the next day but having paid swaps on top (although I may be way wrong here). The only real way around it that I have thought of is to trade as a team and hand the entire basket of open positions off to the next person when your "shift" is finished. This would obviously require a lot of trust and shared mentality between team members though.
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