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Is $100,000 A Decent Capital In Trading?

  • #101
  • May 18, 2019 1:24am May 18, 2019 1:24am
Quoting Simply-Me
{quote} 10000,- equity. 3% risk = 300,- lets's say SL 30pips = 10,- per pip risk,usually 1 standard lot in us currency. I'm too lazy count it exactly but in my eur account 1 lot eurusd laverage is 1st - acc -1:200 = deposit 500,-, 2nd- acc 1:500 = 200,- deposit and account with 3rd - acc 1:30 = 3300,- deposit per 1 standard lot. I risk 3% per trade and according to my SL in pips I adjust size of my stake i eur. So now explain to me,how the higher leverage will cause large drawdown on any of those 3 accounts???
Alphadude can't explain why large drawdowns are the results of higher leverage. If a trader is using a good strategy large drawdowns are normally the result of poor money management not the leverage used.
  • #102
  • Edited 6:45am May 18, 2019 2:00am | Edited 6:45am
Quoting stt
{quote} you originally said retail trader can use high leverage to make higher return..
and where did I say this? Exactly? What are you trying here?

This is what I said and show me a part about high leverage and high return. :
Quoting Simply-Me
{quote} leverage it's only amount of money you're suppose to deposit with broker to open position.Nothing else. If your money management says 3% risk per trade,leverage is not important and it cannot blow your account.You should know better.

So again,talk in numbers ,show me exactly where I'm wrong.I gave you example,you can use it.


Quoting alphadude
{quote} .........traders uses leverage to increase profit potential; so does the risk increases; causing large volatility in the equity curve; and hence large drawdowns; and very long ones {image}
so who is responsible? leverage or trader?His poor judgment, trading skills and most important MM.

Do you have gun at home?I do.Does those guns kill?NO . My guns never killed anybody.How come?Because I use them according the rules and with caution.
Same thing apply for high leverage.
Whether you think you can, or you think you can't,you're right. H.F.
  • #103
  • May 18, 2019 7:43am May 18, 2019 7:43am
if you cant grasp why high leverage is bad for your account, then trading is not for you.

you are better off giving away your full account money to charity instead of going to your broker.

Inserted Video
  • #104
  • May 18, 2019 7:59am May 18, 2019 7:59am
Quoting alphadude
if you cant grasp why high leverage is bad for your account, then trading is not for you. you are better off giving away your full account money to charity instead of going to your broker. https://youtu.be/wrAbR6nZIEs
This still doesn't explain why large drawdowns are the results of high leverage
  • #105
  • May 18, 2019 8:34am May 18, 2019 8:34am
Quoting Hutch
{quote} This still doesn't explain why large drawdowns are the results of high leverage
ok sir, be my guest, and go full steam at high leverage.

see you at the dry cleaners, or perhaps at the moon flag with buzz aldrin
  • #106
  • May 18, 2019 10:48am May 18, 2019 10:48am
what does it mean exactly

Quoting alphadude
{quote} ...... go full steam at high leverage.......
can you talk in numbers? I guess not, because I gave you some numbers and somehow you keep ignoring them and keep posting, whatever is it you posting.
Whether you think you can, or you think you can't,you're right. H.F.
  • #107
  • May 18, 2019 11:30am May 18, 2019 11:30am
Ok so say you start off with a sufficient amount to trade with and the first month you earn enough to pay your bills (whatever amount they are) but the second month you only break even. Now you need to dip into your trading funds to cover that month's bills. Third month you not only don't make your living expenses amount or break even but lose trading capital.

What then?

Of course you could win, win, win the first three months. Not likely but a possibility.

But at some point unless you consistently win and add to your trading capital, to cover months when you will break even or outright lose, .... you will fail.

Numbers never lie.
  • #108
  • Edited 11:59am May 18, 2019 11:47am | Edited 11:59am
Quoting Hutch
{quote} This still doesn't explain why large drawdowns are the results of high leverage
Low Leverage is Slow Death.
High Leverage is Sudden Death.

With High Leverage, your account can not handle even a minor fluctuations.
With Low Leverage, your account can handle major fluctuations.

With High Leverage, when the market goes against you, you are in high tension.
With Low Leverage, when the market goes against you, you may have low tension.

regardless of Leverage, if you dont quit when you realize the market is against you, market will wipe your account.
with Low Leverage, it is wiped slowly (may take 100 trades); with High Leverage, it is wiped instantly(may be in 1 or 2 trades).

Trading is simple activity; because the market is natural phenomena.
Determination + Persistence = Success
  • #109
  • May 18, 2019 11:54am May 18, 2019 11:54am
Quoting SKLearn
{quote} Low Leverage is Slow Death. High Leverage is Sudden Death. With High Leverage, your account can not handle even a minor fluctuations. With Low Leverage, your account can handle major fluctuations. With High Leverage, when the market goes against you, you are in high tension. With Low Leverage, when the market goes against you, you may have low tension. regardless of Leverage, if you dont quit when you realize the market is against you, market will wipe your account. with Low Leverage, it is wiped slowly (may take 100 trades); with High Leverage,...
and this is a reason, why god invented money management
Whether you think you can, or you think you can't,you're right. H.F.
  • #110
  • May 18, 2019 11:57am May 18, 2019 11:57am
Quoting Simply-Me
{quote} and this is a reason, why god invented money management
yep,
there are ALL-In guys, ALL-Out guys, SOME-In gals, FEW-In guys/gals.... lol
Determination + Persistence = Success
  • #111
  • May 18, 2019 12:15pm May 18, 2019 12:15pm
Quoting SKLearn
{quote} Low Leverage is Slow Death. High Leverage is Sudden Death. With High Leverage, your account can not handle even a minor fluctuations. With Low Leverage, your account can handle major fluctuations. With High Leverage, when the market goes against you, you are in high tension. With Low Leverage, when the market goes against you, you may have low tension. regardless of Leverage, if you dont quit when you realize the market is against you, market will wipe your account. with Low Leverage, it is wiped slowly (may take 100 trades); with High Leverage,...
no matter how this is explained, a gullible will not get it.
  • #112
  • May 18, 2019 2:09pm May 18, 2019 2:09pm
Quoting SKLearn
Low Leverage is Slow Death. High Leverage is Sudden Death.
....I won't say these kinds of comments about leverage are right or wrong. Rather, leverage is not a primary consideration in risk management. Someone with faulty risk management can wipe out their account whether they have high leverage or no leverage.

It's up to a trader to know what they are risking at all times. Whether trading one trade or positions with hundred or thousands of trades, a trader needs to know what he is risking before the trade(s) are entered. Fx, futures, options, stocks, whatever - it's your money and you are putting it at risk and you have to know what risk you can accept and when to close positions when that maximum risk is exceeded.

There are traders who will say they are willing to risk their entire accounts and that the equity in those accounts is just a small fraction of their overall risk capital. I don't have a problem with that - I'd guess that is the de facto modus operandi of most so-called retail traders, anyway.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #113
  • May 18, 2019 2:18pm May 18, 2019 2:18pm
Quoting The Fool
There are traders who will say they are willing to risk their entire accounts and that the equity in those accounts is just a small fraction of their overall risk capital. I don't have a problem with that - I'd guess that is the de facto modus operandi of most so-called retail traders, anyway.
....when one learns to use options and spreads and combinations of instruments to trade the markets, it's possible to set up positions where risk is very low. The more margin available, the larger such positions can be, the more returns they can produce.....why it's nice to have larger amounts to trade - back to the original theme of the thread...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #114
  • May 18, 2019 2:42pm May 18, 2019 2:42pm
no free lunch. high leverage is not going to make you rich. it will send you to the cleaners.

show me a retail trader trading at 500:1 leverage who became rich.

no MM strategy is going to save you from the cleaners
  • #115
  • Edited 3:34pm May 18, 2019 3:08pm | Edited 3:34pm
Quoting alphadude
no free lunch. high leverage is not going to make you rich. it will send you to the cleaners. show me a retail trader trading at 500:1 leverage who became rich. no MM strategy is going to save you from the cleaners
of course it won't,neither low leverage is going to make you rich

btw do you trade to become rich?wow no wonder what is your position on leverage
Whether you think you can, or you think you can't,you're right. H.F.
  • #116
  • May 19, 2019 12:50am May 19, 2019 12:50am
Quoting alphadude
{quote} ok sir, be my guest, and go full steam at high leverage. see you at the dry cleaners, or perhaps at the moon flag with buzz aldrin
I deposited funds with my broker only during 2006 when I transitioned from trading stocks to trading forex. After that I only withdrew funds when I needed them. My broker offers a maximum leverage of 50 to 1 for major currency pairs, 20 to 1 for the minors and 10 to 1 for CFDs. Since I’m considered to be a professional trader I have a 100 to 1 leverage. The guy in the video did not convince me at all that large drawdowns are the results of high leverage. Large drawdowns are exclusively due to bad trading and poor money management. Sorry, you will never see me at the dry cleaners because it’s impossible for me to go broke:

Large drawdowns are exclusively due to bad trading and poor money management. Sorry, you will never see me at the dry cleaners because it’s impossible for me to go broke
  • #117
  • May 19, 2019 12:53am May 19, 2019 12:53am
Quoting SKLearn
{quote} Low Leverage is Slow Death. High Leverage is Sudden Death. With High Leverage, your account can not handle even a minor fluctuations. With Low Leverage, your account can handle major fluctuations. With High Leverage, when the market goes against you, you are in high tension. With Low Leverage, when the market goes against you, you may have low tension. regardless of Leverage, if you dont quit when you realize the market is against you, market will wipe your account. with Low Leverage, it is wiped slowly (may take 100 trades); with High Leverage,...
Here is an example of poor money management.
Attached Image (click to enlarge)
Click to Enlarge Name: 5 millon account blown.png Size: 67 KB
  • #118
  • May 19, 2019 6:38am May 19, 2019 6:38am
Quoting Hutch
{quote} I deposited funds with my broker only during 2006 when I transitioned from trading stocks to trading forex. After that I only withdrew funds when I needed them. My broker offers a maximum leverage of 50 to 1 for major currency pairs, 20 to 1 for the minors and 10 to 1 for CFDs. Since I’m considered to be a professional trader I have a 100 to 1 leverage. The guy in the video did not convince me at all that large drawdowns are the results of high leverage. Large drawdowns are exclusively due to bad trading and poor money management. Sorry,...
and the proof mr profrssional? it is easy to say on FF whatever they want.

show us myfxbook, recent couple of years will be enough.

btw: 50 or 100:1 is not considered too high lev.
  • #119
  • May 19, 2019 6:46am May 19, 2019 6:46am
Quoting Hutch
{quote} Here is an example of poor money management. {image}
incorrect. that loser who created gofundme page, lost because of extremely high leverage. a spike that went against him in one night wiped him out.

if he used low lev, he would have survived to trade another day.

that is a classic example of misusing leverage.

btw, Leverage IS money management. i dont understand why you separate the 2. allocating high leverage to your order is money management.
  • #120
  • May 19, 2019 7:12am May 19, 2019 7:12am
Quoting alphadude
{quote} and the proof mr profrssional? it is easy to say on FF whatever they want. show us myfxbook, recent couple of years will be enough. btw: 50 or 100:1 is not considered too high lev.
I never said that I was a professional trader. My forex broker offered me professional status because I had been trading a long time and I did not refuse. Would you refuse when normal leverage is only 30 to 50 to 1 these days in most countries? What do you consider high leverage? I don't need to prove anything to anybody so forget myfxbook.
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