Menu
Sister Sites

Options

Bookmark Thread

First Page First Unread Last Page Last Post

Print Thread

Similar Threads

High leverage -> high risk: Please explain 22 replies

WRB/MC strategy:Coder needed to semi-automate my strategy 11 replies

Is opposite of losing strategy a winning strategy? 21 replies

Spread/Pairs Trading. High Volume, High Speed, High Stress. 1 reply

High Risk System Strategy 35 replies

Attachments: High Risk Strategy
Exit Attachments

High Risk Strategy

Trade high risk on a small side account, and its just a matter of time before you carry that behavior to the bigger account. Especially if it works and you get in that euphoric state of mind. You might think now you wouldn't, but trust me; you will. A good way to know that you are betting your edge too much is the Kelly formula. Quite short, i bet 1/3 of that. So, the risk of ruin is zero and the risk of a drawdown of more than 50% is low.

Don't fall for the same trap I fell and I guess many are still falling for. The desire to get rich quick. First you need adequate capital to do this ( 10000$ -50000$). Two aim for a 40% annualized return. You can do more than that on average as a small size trader, but just having realistic expectations goes a long way.
When you see it, BET big.
Quoting gian97
Ok, it is clear that we all try to respect the rules and money management BUT ... who of you has a secondary account where he uses high risk strategies? I am obviously referring to: aggressive lot sizing, alternative money management, etc ... Everything that leads you to double your account easily ... more times than you could burn it ... Now everyone will say "GAMBLING !!" but I don't agree: you can also have a backtested strategy of this type that burns your account 20% of the time. BUT HOW MUCH EARNINGS 80% OF THE TIMES CAN MAKE A DIFFERENCE...
I also don't agree with it as necessarily being gambling.

The skill level of the trader has much to say about it.

I have 3 consecutive double digit monthly returns showing on real trading accounts and visible on public TEs in my profile as well as via MyFxBook.

I simply dedicated one thread namely GamblerPro where traders with disposable income can challenge me to a month of trading and be named in Post 1 if they can out trade me or other High Risk traders.

Nevertheless, not many traders challenge me which is a pity but also a reality. I guess many traders do not have the desire to push the limits publicly.

I use small live funded accounts around $1000 for what I call High Risk trading.

But I can just as easily use 10k, 25k or 50k if I choose.

Bare in mind that the risk capital has been obtained from a small part of profit generated from profitable lower risk longer term trading strategies.

The proceeds from these High Risk trading strategies can be used for any purpose including returning of some or all of the funds taken from the lower risk longer term strategies.

I ensure that the High Risk mentality never enters into the low risk longer term strategies.

ps. profit gained from the High Risk could also be used to pay for the entry fee into several suitable Prop Firms.

Good trading,

Masterrmind........
Master your Mind then Master your Trades
Quoting Masterrmind
{quote} The skill level of the trader has much to say about it
Well said. And that's the key to trading.. whether high risk or not. The skill and experience level.

I personally dont have a secondary high risk account, but many times I am tempted to have one and just go to town with it lol.

But then I stop myself... because like Rennaissance's post above, I am afraid I might carry that behavior over to the real bigger account, which is just asking for trouble.

Quoting Masterrmind
{quote} ps. profit gained from the High Risk could also be used to pay for the entry fee into several suitable Prop Firms.
That is actually a good motivation since I have been hearing more and more of these prop firms lately. Beats having to put up a big capital of own money, which is not feasible for many traders to begin with. As long as they treat the prop account like their own money and trade low risk (once they get funded).
In other news: A ranger was trapped between a bull and a bear
Quoting digiff
{quote} Well said. And that's the key to trading.. whether high risk or not. The skill and experience level. I personally dont have a secondary high risk account, but many times I am tempted to have one and just go to town with it lol. But then I stop myself... because like Rennaissance's post above, I am afraid I might carry that behavior over to the real bigger account, which is just asking for trouble. {quote} That is actually a good motivation since I have been hearing more and more of these prop firms lately. Beats having to put up a big capital...
The trader has to be completely in control of his/her emotions.

Unfortunately, this is difficult for most traders but more so for the less experienced.

The route to becoming a successful trader that can trade multiple strategies (scalp, swing, position) over short to medium to longer term periods is only for the highly dedicated and experienced traders.

Newer, or less experienced traders should definitely trade 1 with maybe 2 maximum trading strategies.

The critical part here is for the trader to become intimately familiar with each strategy traded across the symbols of choice and steer clear of mixing High Risk with Low Risk techniques.

Masterrmind........
Master your Mind then Master your Trades
Quoting gian97
Ok, it is clear that we all try to respect the rules and money management BUT ... who of you has a secondary account where he uses high risk strategies? I am obviously referring to: aggressive lot sizing, alternative money management, etc ... Everything that leads you to double your account easily ... more times than you could burn it ... Now everyone will say "GAMBLING !!" but I don't agree: you can also have a backtested strategy of this type that burns your account 20% of the time. BUT HOW MUCH EARNINGS 80% OF THE TIMES CAN MAKE A DIFFERENCE...
Reach out and take whatever you can.. So good knowing I'm not alone. I do it with the 20ema
The fact is that you keep thinking that HIGH RISK means that you start gambling. The only one who has understood the concept is masterrmind.
High risk does not mean that you enter long on each ascent and short on each descent, it only means that you have done your analysis and while on your large account you have entered with the right risk, on the smaller one you can scalping, pyramid or apply a different money management for that position.
There is also a strategy for speculating and taking risks. It's not that we're talking about opening a random chart and throwing a short or a long one there.
Quoting Masterrmind
{quote} I also don't agree with it as necessarily being gambling. The skill level of the trader has much to say about it. I have 3 consecutive double digit monthly returns showing on real trading accounts and visible on public TEs in my profile as well as via MyFxBook. I simply dedicated one thread namely GamblerPro where traders with disposable income can challenge me to a month of trading and be named in Post 1 if they can out trade me or other High Risk traders. Nevertheless, not many traders challenge me which is a pity but also a reality. I...

This is the smartest approach imo. If you take excess profits and repurpose them, that's when a "high risk" account is not only viable, but an attractive approach. It can make trading more exciting, and therefore rewarding for us, while utilizing profits that were beyond our targets anyhow.
It seems to me that any strategy in the market is risky, dangerous, etc., because here you can never be 100% sure that you are right. But you can definitely do something to minimize the risks and to make your work in the market as safe as possible. And it's not really that difficult, because all you have to do is limit the loss parameters so that you don't cross a certain threshold. Plus, you have to understand that in order to work safely in the market you need to have a strong enough capital, which will be able to protect you in case something happens that you could not foresee. So you don't have to get depressed, you don't have to think that you can't do it. You need to make a concrete plan of action and follow it. Then you'll be fine.
  • Post #29
  • Quote
  • Last Post: Edited Jul 27, 2020 3:40am Jul 26, 2020 3:23pm | Edited Jul 27, 2020 3:40am
Quoting Mossma
It seems to me that any strategy in the market is risky, dangerous, etc., because here you can never be 100% sure that you are right. But you can definitely do something to minimize the risks and to make your work in the market as safe as possible. And it's not really that difficult, because all you have to do is limit the loss parameters so that you don't cross a certain threshold. Plus, you have to understand that in order to work safely in the market you need to have a strong enough capital, which will be able to protect you in case something...
withdrawal is meant to protect your capital e.g. if the odds are stacked against you. no problems with safety, just make sure your broker has negative balance protection in case of high leverage.
0 traders viewing now