After years of studying the markets and designing system after system, I have finally found something that works for me. I took it live these last two weeks and was very disappointed with the results. A member of my trading group also used the same method, (it is automated) and made 4 weeks worth of goal during the same time period.
What causes this vast disparity in results? My conclusion is that I stuck to some very rigid risk management rules, and "locked in" losses while my friend continued trading and made money.
My risk management rules are based on percentage of capitalization but it after these last couple of weeks it appears they were too tight...
So here is what I did...each trade enty risks 2%. I stop trading if I reach 3% loss in any day, and 6% loss in any month.
Well, looks like I'm not trading for the rest of the month...but I'm wondering, do any of you LIVE traders out there have any suggestions for capitalization and risk managment?
I'm thinking of recapitalizing but this time sufficient for each trade to risk 1%. Do you think this too much risk?
Most books I've read use the standard 2%, 6% rules...but those are books...what are you LIVE traders doing out there?
What causes this vast disparity in results? My conclusion is that I stuck to some very rigid risk management rules, and "locked in" losses while my friend continued trading and made money.
My risk management rules are based on percentage of capitalization but it after these last couple of weeks it appears they were too tight...
So here is what I did...each trade enty risks 2%. I stop trading if I reach 3% loss in any day, and 6% loss in any month.
Well, looks like I'm not trading for the rest of the month...but I'm wondering, do any of you LIVE traders out there have any suggestions for capitalization and risk managment?
I'm thinking of recapitalizing but this time sufficient for each trade to risk 1%. Do you think this too much risk?
Most books I've read use the standard 2%, 6% rules...but those are books...what are you LIVE traders doing out there?