Here's one of my earlier posts to help you guys out....I will also be filming a Forex documentary starting this November and will be posting it on Youtube for free, it will be called "Breaking Forex"....
first of all, like i stated before it depends on how your doing it, and the whole idea is that when you do lose your only losing on a slither/fraction of a contract therefore the losses are really kept to the bare minimum....it rubs people the wrong way because in the simplest form your right, you will lose if you do it the conventional way, but there are a couple of ways and a few more caveats to this discussion that your not aware of that negate the negatives about position sizing that you believe....
cut losses short and let profits run is the golden rule, if you look and concenrate your efforts on the cut losses short part of it in terms of position sizing a la van tharp you'll start to realize and come to open your eyes the the negatives you speak of can be negated and therefore when you do have a winner that you ride and add on to it more than makes up for all the little losses, and this is what long term sustainability is all about, and with this type of system im also making the most out of my wins, so if a trade goes 100 pips in my favour instead of me making lets say 1000 dollars because i position sized correctly on that same 100 pips i make roughly 1700 dollars instead, so now when im losing i only lose a fraction of a contract at a very miniscule cost compared to the monster gains i make when i win.....
my trading didnt take off until i started to concentrate on position sizing in relation to cutting those losses short, i knew how to let profits run and build onto a trend but i had problems with that because when the market retraced and came back i lost money on the trade and the scale ins, then i started focusing on how i can scale in without being exposed to retracements and crashing the position sizing and therefore i started to concentrate more on the cutting losses short part of it and its made a huge difference in my trading performance, and in the end my friend the simplest mathematical fact you cant ignore is at the end of the month wheather your wins outweigh your losses....cheers
first of all, like i stated before it depends on how your doing it, and the whole idea is that when you do lose your only losing on a slither/fraction of a contract therefore the losses are really kept to the bare minimum....it rubs people the wrong way because in the simplest form your right, you will lose if you do it the conventional way, but there are a couple of ways and a few more caveats to this discussion that your not aware of that negate the negatives about position sizing that you believe....
cut losses short and let profits run is the golden rule, if you look and concenrate your efforts on the cut losses short part of it in terms of position sizing a la van tharp you'll start to realize and come to open your eyes the the negatives you speak of can be negated and therefore when you do have a winner that you ride and add on to it more than makes up for all the little losses, and this is what long term sustainability is all about, and with this type of system im also making the most out of my wins, so if a trade goes 100 pips in my favour instead of me making lets say 1000 dollars because i position sized correctly on that same 100 pips i make roughly 1700 dollars instead, so now when im losing i only lose a fraction of a contract at a very miniscule cost compared to the monster gains i make when i win.....
my trading didnt take off until i started to concentrate on position sizing in relation to cutting those losses short, i knew how to let profits run and build onto a trend but i had problems with that because when the market retraced and came back i lost money on the trade and the scale ins, then i started focusing on how i can scale in without being exposed to retracements and crashing the position sizing and therefore i started to concentrate more on the cutting losses short part of it and its made a huge difference in my trading performance, and in the end my friend the simplest mathematical fact you cant ignore is at the end of the month wheather your wins outweigh your losses....cheers
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