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There's no such thing as "low risk"

  • #21
  • Aug 19, 2020 12:52pm Aug 19, 2020 12:52pm
Quoting OnlineAddict
{quote} What does that have to do with anything? Did you even read what I wrote? EVEN If just 1 out of 1 million people can do something, then it CAN BE DONE, it doesn't matter that the other 999,999 can't do it.

you said it's about me! I replied that it's about US.

so are you one of those few rich traders who believe in low risk/ high returns ?
  • #22
  • Aug 19, 2020 3:21pm Aug 19, 2020 3:21pm
Take this grain of salt as advice.

Say you are a horrible trader, with absolutely no edge whatsoever, and you use a risk of 1:1 on every trade. Or, even if you randomly trade without any strategy or edge, but you only risk 0.1% per trade.

In this case you would need to lose 1000 trades in a row to blow your account. Using a risk to reward of 1:1 statistically even with no edge you should achieve a win rate of about 50% after 1000 trades, or somewhere around that, maybe a bit less or a bit more, depending on luck. You then will be left with virtually the exact same balance that you started with if you trade a pair with low spread like lets say EURUSD. So, in the end your net loss will only be the spread or the cost paid to the broker.

Now, once you develop some sort of edge, that increases your average win rate to even 55%, this should be able to cover the broker costs and leave you with a net profit in the end, after about 1000 trades. Let's just say its 2.5% profit after 1000 trades.

Now, what you can do once you get good enough is;
1. Use a better risk to reward style, such as a trailing stop, 1:2, 1:3 etc.
2. Have a higher win rate using some type of edge.
3. Both.

In the case of (3). After 1000 trades risking about 0.1% per trade using a 1:2 risk to reward with a 55% win rate, in this case your net profit will be 65% ROI.
After calculating spreads and other costs, you may be left with about 50% ROI, after 1000 trades.

In this case you are trading very low risk, seeing as you are only risking 0.1% of your account per trade with a win rate of 55%.

Play with these numbers to find what works best for you, but in any case as I stated before, risk is a matter of tolerance, and it varies between traders who have different account balances.
  • #23
  • Aug 19, 2020 10:13pm Aug 19, 2020 10:13pm
Trading is not some special kind of business.

Might be a little more challenging than the most of the businesses.

All businesses stay in a draw-down like 80% or higher, every month.

Those who run any kind of business do know what I am talking about.

So, is it all busenesses high risk then?

And there is no such thing as a low risk, ever, in any kind of business? As the draw-downs always first say "hello" and stay for a damn long time?

What about the skills of running a business?

What if all that applies to money as general, as money is everything nowadays?

Is all money high-risk?

Maybe you are right. Maybe, with money, there is no low risk in a first place?


BTW, not knowing the future applies to Life in General. In everything. Still, there are skillful humans, who survive in Life with ease...
Maadik Hugiis. IQ 69.
  • #24
  • Aug 19, 2020 11:05pm Aug 19, 2020 11:05pm
Quoting MoneyZilla
Trading is not some special kind of business. Might be a little more challenging than the most of the businesses. All businesses stay in a draw-down like 80% or higher, every month. Those who run any kind of business do know what I am talking about. So, is it all busenesses high risk then? And there is no such thing as a low risk, ever, in any kind of business? As the draw-downs always first say "hello" and stay for a damn long time? What about the skills of running a business? What if all that applies to money as general, as money is everything...
good post. Thanks.
  • #25
  • Aug 20, 2020 3:05am Aug 20, 2020 3:05am
Quoting MoneyZilla
Trading is not some special kind of business. Might be a little more challenging than the most of the businesses. All businesses stay in a draw-down like 80% or higher, every month. Those who run any kind of business do know what I am talking about. So, is it all busenesses high risk then? And there is no such thing as a low risk, ever, in any kind of business? As the draw-downs always first say "hello" and stay for a damn long time? What about the skills of running a business? What if all that applies to money as general, as money is everything...

yes but other businesses can be expanded, promoted... here we are at the mercy of the market and the broker which adds more risk.
  • #26
  • Aug 20, 2020 3:19am Aug 20, 2020 3:19am
We all talk a lot about uncertainty in the fx markets but one thing we all have 100% control over is how much we lose.

I think a lot of traders forget that one basic fact.
  • #27
  • Aug 23, 2020 2:31pm Aug 23, 2020 2:31pm
Quoting ChilledT
We all talk a lot about uncertainty in the fx markets but one thing we all have 100% control over is how much we lose. I think a lot of traders forget that one basic fact.
a businessman should not be worried about other people's losses..... hahaha

"we all have 100% control over is how much we lose". .. not so obvious.. that's why we see so many negative posts.


in any case, facts don't matter... we are all traffic generators
  • #28
  • Aug 24, 2020 9:42am Aug 24, 2020 9:42am
Quoting HeyYou
{quote} yes but other businesses can be expanded, promoted... here we are at the mercy of the market and the broker which adds more risk.
Forex trading is the same as other business. it can be expanded, promoted and many more. Do you trades random pairs for specific entry rules?
Let's try to think this way as how i think when i trade.
You are trader with 3000 USD as your capital currency. you got a little shop selling only three products. Euro, Pounds, and Yen. you sell them with $2 profit for each product. Sometimes bad things happen and you sell bad products for lets say you lose $1 for each bad product. (1:2 RR). at the end of the month your business sold 1000 products, lets say you got 60% accuracy so your profit is $800.

It can be expanded. as your profit grows, you start to sell another product. CAD, CHF, AUD, or whatever.
It can be promoted. you have good portpolio, you teach others by selling strategies, IB commisions, Copytrade and so on.

IF you fail in a long run. in this case you got $5900 in 1 year, then shit happens makes you loss much. Make sure you only loss $3000 as it is your initial capital. dont include the $2900 as it is your profit. Means you only lose $100. This is low risk.
  • #29
  • Aug 25, 2020 1:28am Aug 25, 2020 1:28am
Well it all depends on how much money you have in your trading account and how much you can risk. Thats the game as soon as you get in.


I feel like as soon as you think the market is against you. You've lost imo
  • #30
  • Aug 25, 2020 2:45pm Aug 25, 2020 2:45pm
Thank you guys for your posts.

so we can conclude that trading high risk is low risk
I mean, if you risk a lot per trade or don't diversify then you can lose fast... but it's no big deal because you lost small.

I see it as "an all or nothing bet" .. which makes perfect sense to me.
  • #31
  • Aug 25, 2020 3:07pm Aug 25, 2020 3:07pm
Very low number of trades + extremely high pip targets.

Makes trading entirely a low risk business/gambling/hobby... just whatever one likes to call it?
Maadik Hugiis. IQ 69.
  • #32
  • Sep 1, 2020 11:23am Sep 1, 2020 11:23am
Quoting MoneyZilla
Very low number of trades + extremely high pip targets. Makes trading entirely a low risk business/gambling/hobby... just whatever one likes to call it?
This advice must come from an experienced trader

i also think that high % targets or pip targets are the most important thing in this business/game.
  • #33
  • Sep 1, 2020 12:27pm Sep 1, 2020 12:27pm
here's what I'm doing right now... I bet on a couple instruments (one would be too crazy, but that's ok... IMO) and set high % targets.... I mean 500 at least...with money I can afford to lose.
  • #34
  • Sep 1, 2020 3:13pm Sep 1, 2020 3:13pm
Quoting MoneyZilla
Trading is not some special kind of business. Might be a little more challenging than the most of the businesses. All businesses stay in a draw-down like 80% or higher, every month. Those who run any kind of business do know what I am talking about. So, is it all busenesses high risk then? And there is no such thing as a low risk, ever, in any kind of business? As the draw-downs always first say "hello" and stay for a damn long time? What about the skills of running a business? What if all that applies to money as general, as money is everything...

lol what business? What product or service are you providing when you engage in retail forex trading? This is just gambling and your odds are no better than that of a roulette or blackjack player. The broker will always have the edge because of the spread you're paying

Quoting OnlineAddict
{quote} What does that have to do with anything? Did you even read what I wrote? EVEN If just 1 out of 1 million people can do something, then it CAN BE DONE, it doesn't matter that the other 999,999 can't do it.
Yet I can guarantee you cannot name a single retail forex trader who is profitable over time.
  • #35
  • Sep 1, 2020 4:18pm Sep 1, 2020 4:18pm
Quoting HeyYou
Don't tell me that you trade "low risk" because you use a SL, please! even if you risk 0.1%/trade and you are super diversified you are still trading high risk.......... why ? because your money is in a broker's bank account. "but I'm using an amzing system" no one has the magic wand, nobody knows for sure what is going to happen.. not even central banks. all you have is predictions and anticipations. I don't believe "low risk" exists in FX.
Risk is all relative, it differs between everyone and it all boils down to two things - what their individual psychological risk tolerance is, and the actual amount of money risked on said position.
  • #36
  • Sep 1, 2020 4:43pm Sep 1, 2020 4:43pm
Quoting Trenderer
Yet I can guarantee you cannot name a single retail forex trader who is profitable over time.
I can. But why would I? I am not trying to prove anything or convince anyone, I said my opinion and everyone can believe what they want.
Everyone can see the chart, but only a few can actually read it.
  • #37
  • Sep 1, 2020 5:31pm Sep 1, 2020 5:31pm
Quoting OnlineAddict
{quote} I can. But why would I? I am not trying to prove anything or convince anyone, I said my opinion and everyone can believe what they want.
Sorry but you cannot. I stated a fact but unfortunately many still believe that retail forex trading can be a profitable long term endeavor
  • #38
  • Sep 1, 2020 6:32pm Sep 1, 2020 6:32pm
Quoting Trenderer
{quote} lol what business? What product or service are you providing when you engage in retail forex trading? This is just gambling and your odds are no better than that of a roulette or blackjack player. The broker will always have the edge because of the spread you're paying {quote} Yet I can guarantee you cannot name a single retail forex trader who is profitable over time.
Ok.
  • #39
  • Sep 1, 2020 8:30pm Sep 1, 2020 8:30pm
Quoting Trenderer
{quote} lol what business? What product or service are you providing when you engage in retail forex trading?

Money is goods. lol
Seems the most important and expensive goods on the planet at the moment. Money is more expensive than gold. Last but not least, money is more expensive than human life, in case you did not notice that simple fact? lol

Quote
This is just gambling and your odds are no better than that of a roulette or blackjack player.

Maybe for you forex is gambling? I can't know how you are looking at trading the goods of money. Just accepting you are honest. Not everyone is in your category, however.

Quote
The broker will always have the edge because of the spread you're paying {quote} Yet I can guarantee you cannot name a single retail forex trader who is profitable over time.

If you can't handle spread, maybe it is better not to gamble?

BTW, in one side trading, spread has little to no effect whatsoever. Plus, most of the brokers are doing their best to keep the good traders to trade with them. You would know this, if you were a good trader yourself. If you are a broker, you are deadly stupid, if you are not keeping the profitable traders in the house. Use your brain to figure out why... Dunno if you are broker. Not fighting.

Try this gamble strategy:
Bet on buys only. On the gold. Open very little number of buy trades when the rate falls. Avoid opening your buys during the falls, do it when the rate retraces up instead. Working with h4 might be a better bet, I guess? Aim at 50 bucks per 0.01 lot, as an average profit per a single trade/bet. Let me know how it went? lol
Maadik Hugiis. IQ 69.
  • #40
  • Sep 1, 2020 8:41pm Sep 1, 2020 8:41pm
Quoting MoneyZilla
{quote} Money is goods. lol Seems the most important and expensive goods on the planet at the moment. Money is more expensive than gold. Last but not least, money is more expensive than human life, in case you did not notice that simple fact? lol {quote} Maybe for you forex is gambling? I can't know how you are looking at trading the goods of money. Just accepting you are honest. Not everyone is in your category, however. {quote} If you can't handle spread, maybe it is better not to gamble? BTW, in one side trading, spread has little to no effect...
lol I would be more inclined to debate if you could form just one coherent sentence. But good luck playing a losing game, I sincerely hope you do not gamble away money that you can't afford to lose
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