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The brutal truth of day trading

to me, it already seems like we are applying atomic physics to screwing in a simple screw.
lol.
Quoting gepards
{quote} what dd I can survive with leverage 1:10 if I for example open BUY 0.01 lots with 1000 usd on account in max bad time - going down and down after that... ? how big dd I wont be stop out if stop out is on 50% ? just thinking of this idea that I can put X usd lets say every months as on saving account for example in some FCA regulated broker... so money protected.
Leverage allows you to hold your money in your own bank and trade with your broker's money.

Instead of funding your account with all your savings, you just transfer 1/50th of your capital to your broker's account and then you trade leveraged 1:50 or 1:200 if you just move 1/200th of your capital (also, this is not linear maths, just to give an idea). This readuces quite a lot your risk because if your broker has an issue and cannot give back your funds, you will be in a serious situation; while if you keep your money at your bank, that is much safer.

However, if the assets are very volatile, one does not need leverage because volatilty replaces it and you can still trade with a very small proportion of your capital and keep the rest safe at your bank.
Quoting gepards
{quote} 100% ROI yearly is not so imposible... maybe... Just thinking regarding webinar and NQ100 - mentioned in this my post... maybe even buy the dips is too complicated... what could be more simple? Answer = BUY. Just one activity. No closing trades. Why complicate? Entry rules for NQ100? hmmm.. no rules... for example BUY at NY open every 6 working days... here are backtest results (made EA to see how that idea would work out). Results from 2018. Start with 1000 usd....
Regarding NQ, if you analyze it, it has increased its value a few hundred of times, much more than any investment fund I know about or has been offered to me.

That is why I see these funds which historical increase is 4% a year, I think why these "specialists" or financial advisors cannot outperform what a passive investment on S&P500 or NQ could have returned. It is ridiculous.

It is just something I find irritating, all these financial products unable to make at least the same that a passive investment on NQ.
Quoting Swede
{quote} I have been practicing that very thing for years because I was badly burned during the Refco failure (lost over 25,000.00). Never again have I deposited more than 1000.00 at any one time and yes I trade leverage to the max, 1:500 my preference and remove my wins when I feel like it. So, I can never brag about my huge account, or show you how smart I am, or gain the attention of followers (who cares?) I just go about my business like I always have the past 20 years or so, never trading anything without some thought and understanding of market...
I just consider a large trading account essential to achieving good profitability because it’s easily to win taking small steps on a $50,000 account, than huge leaps on a $1000 high leveraged account.
You have to risk money to make money.
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Trading thin liquidity at the boundary of the charts
Quoting Swede
{quote} I have been practicing that very thing for years because I was badly burned during the Refco failure (lost over 25,000.00). Never again have I deposited more than 1000.00 at any one time and yes I trade leverage to the max, 1:500 my preference and remove my wins when I feel like it. So, I can never brag about my huge account, or show you how smart I am, or gain the attention of followers (who cares?) I just go about my business like I always have the past 20 years or so, never trading anything without some thought and understanding of market...
There's a blast from the past.. I as well lost all my funds when Refco went bust.. 2005 I think it was. Since then I am careful as to what i have on deposit with any one broker.
Shit happens and it happens when you don't think it can happen. If a trader is trading with any size at all its best to keep only the minimum required for you to trade.
And to utilize a few brokers if you can.

Besides Brokers going bust situations have occurred for example when a platform goes down...If your trading with size and leverage you best have another account where you can offset open positions ,if necessary, if the market is running against you.

Anything can happen at all times can be a hard lesson to learn

Cheers
Blue
The Best Loser Wins
Quoting RickM
{quote} I just consider a large trading account essential to achieving good profitability because it’s easily to win taking small steps on a $50,000 account, than huge leaps on a $1000 high leveraged account. You have to risk money to make money. {image}
This bolded statement is very important to properly understand it in the world of gambling and speculation.

The best gamblers and speculators are a special breed of geniuses in their own right in this one aspect as if they were born to live with risk, that's why they are the best of the best the top 0.1% percentile. The rest of us will never be there because we fail to appreciate risk management in its true context.

We fail to embrace risk at the height of its volatility. We fail to tame the beast. I understand it BUT fail to live it.

https://youtu.be/ucxIMSwamqI
Quoting BWilliam
{quote} This bolded statement is very important to properly understand it in the world of gambling and speculation. The best gamblers and speculators are a special breed of geniuses in their own right in this one aspect as if they were born to live with risk, that's why they are the best of the best the top 0.1% percentile. The rest of us will never be there because we fail to appreciate risk management in its true context. We fail to embrace risk at the height of its volatility. We fail to tame the beast. I understand it BUT fail to live it.


Then it needs to be emphasized in a different way, because someone who has not lived it does not really understand, I would call it "comprehending" rather than understanding here.

Leverage is not 1:50 etc. but the multiplier of what is on the table. That is all. This is why some brokers cap the lev available to some traders at say 1:100. Beyond a certain point they (the broker) must carry the risk their account holders want. Also, to layer a setup with say 1:10 leveraged 10 x 1K orders is no different than the alternative of 2 x 5K at twice the leverage. Why? While most are focused on the margin and lev level and what the account needs etc (And these are important), once all orders are activated in the market, the basic debt function of risk increases. This means that if one of those orders creates a loss in real time, with the same account being used for all orders filled, then the risk burden of ALL orders filled increases. It's the multiplication effect of using leverage that increases the risk to the account before you even consider local volatility and everything else involved. It is a mistake to think that an account setup with 1:10 lev and using 10K tickets is "better" or "worse" based on these settings than an account with higher lev. based merely on the surface figures.

The risk burden is something brokers will not discuss because this would in turn, mean they disclose their business plan as a broker. And that's a no-no. As some have noted, in real life, leverage = debt multiplied. But not all set locales on an instrument's recent history are automatically 'low risk' or 'high risk'. A small account holder can use low leverage and still produce very good net profits..... once you appreciate the "grey area" of using leverage. For most people with margin cap under $100,000, my suggestion would be max 1:10 lev and start with 1000 unit contracts. For OTC FX, this is usually 0.01 lots. Why? A good mix of 'better than normal' lev for capital while maintaining ample buffer for the unexpected "Oh NO !! A Black Swan event". Hehehehe. Compressed swings in your account due to the leverage being set too high causes margin calls that need not happen, ever.

So a good analogy for all this could be ......

Instead of someone trying to be EITHER the tortoise OR the hare, be BOTH. The tipping point will come when your approach's performance capability in its purest form, exceeds the need to try and manipulate your way to achieving your goals.

As I said, it's just a suggestion. But years of watching the markets tells me that an all inclusive approach will save you money and keep you profitable over trying to force or manipulate your outcomes to happen.



Peter

Trading's for those who learn independently. Everyone else is just blind.
Quoting Swede
... But that’s just me, I am certainly not a gambler anymore....

Boring, isn’t it? {image}
Ofc we're gamblers when we trade with this bs.

Quoting Swede
..... never trading anything without some thought and understanding of market structure, basic analyses and a degree of confluence....I have gained some understanding of geometric analyses the past year...
It's more than ok to gamble in the largest casino that the forex market is. What's worse bs is not to realise all us traders are gambling under the nice name call Forex trading. Call a spade a spade.

Sick of gambling?

Close your account.
Quoting PeterCaleb
{quote} Then it needs to be emphasized in a different way, because someone who has not lived it does not really understand, I would call it "comprehending" rather than understanding here. Leverage is not 1:50 etc. but the multiplier of what is on the table. That is all. This is why some brokers cap the lev available to some traders at say 1:100. Beyond a certain point they (the broker) must carry the risk their account holders want. Also, to layer a setup with say 1:10 leveraged 10 x 1K orders is no different than the alternative of 2 x 5K at twice...
Leveraged is linked to the amount of risk you can take.
I look for brokers who have robust and fool-proof margin trading sytesm.
Reputed exchange-traded instruments brokers provide a letter of guarantee or bond to the exchange. Not transfer any money.
Exchanges have determined good faith deposit or initial margin and it is not obligatory on the part of any reputed broker to implement it.
But they do so because they will be sitting on a load of cash piled up from the customers and make money from the pile of cash.
A smart broker who has a fool-profit margin trading system also gets the same facility from the exchanges by putting up guarantees.
They will accept 5% of what an exchange expects by way of good faith deposit.
What they are looking for is more commissions.

Trading exchange-traded futures saves you from being manipulated by CFD brokers who use the same data and package in their own toys called CFDs and make money from wild spreads. They don't want commissions in which case they have to be transparent. They declare themselves to be market makers to avoid regulators' ire.

Futures attract no swap costs, traders are not prone to being manipulated and the broker's only source of income is from commissions.
High leverage offers hugely affect established broker's business by helping a trader like me achieve capital efficiency.
Using Leverage with IB making 20% pa return on initial margin (say $8,000) and risk money of $1000 and investing (total $9,000) turns over 10 contracts making a total net profit of $2000 amount.

By shifting to a broker who undercuts IB by accepting $400 or 5% of what IB/exchanging is asking for as the initial deposit the trader has to invest $400 +1,000 (total $1,400) that has increased the return on margin money to 220% pa but has not made any difference to the $amount profit of $2000 amount.

So what is the big deal about having high leverage?

A shrewd trader will use the leverage not to overtrade but to achieve capital efficiency because of his/her faith in risk-taking techniques to control reckless trading.
Practice makes a person perfect
Quoting BWilliam
{quote} Ofc we're gamblers when we trade with this bs. {quote} It's more than ok to gamble in the largest casino that the forex market is. What's worse bs is not to realise all us traders are gambling under the nice name call Forex trading. Call a spade a spade. Sick of gambling? Close your account.
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Hobby Trader
Speculation = Calculated gambling
So many words
Gambling is negative for the player - again statistics
A team (17 wins out of 18) vs B team (2 wins out of 18)
Coefficient for A team 1X = 2 B team X2 = 4
200 USD for A team and 100 USD for B team
So do you speculate or gamble?
Gamble for team B and speculation for team A?
Speculate, gamble, invest, risk, manufacture; end product is money or loss
Eat, drink; end product is good fart and ...
Or gambling is only in the casino?
So many BS. Nothing straight to the point. Decorated with fancy words. Just say 1 2 3. That's all.
Don't care
https://www.youtube.com/watch?v=Io4fxdBEApc
Obviously the intellectual gift of discernment alludes some if not many. The ability to discern the difference between speculation and gambling is important. Indifference to the distinctions that separate the two is likely to affect your approach to trading. Gambling occurs when there is little or no ability to analyze factors that may affect outcome whereas speculation involves identifiable factors that can be analyzed. For example in Blackjack one is limited to statistical outcomes of the various presentation of cards on the table and what might be left in the deck. There really are no other factors. The trading of financial instruments on the other hand offers nearly endless variables that present themselves for analysis by the trader. Trading can be approached from a statistical point of view for example by analyzing probabilities associated with patterns or it can be approached via fundamental analysis or a combination of the two.

A gambler might as well toss a coin to decide whether to go long or short while a speculator will use a potentially vast amount of data at his disposal to make the decision to buy or sell. The distinctions between the two is vast. Failure or refusal to recognize this difference is just intellectual laziness or obstinance. Beyond that it would just be stupidity.
Hobby Trader
Quoting Winston Reed
Obviously the intellectual gift of discernment alludes some if not many. The ability to discern the difference between speculation and gambling is important. Indifference to the distinctions that separate the two is likely to affect your approach to trading. Gambling occurs when there is little or no ability to analyze factors that may affect outcome whereas speculation involves identifiable factors that can be analyzed. For example in Blackjack one is limited to statistical outcomes of the various presentation of cards on the table and what might...
In summary, there is a relation but also a clear distinction when one considers the decision making process before a "bet" is taken.
Quoting Winston Reed
Obviously the intellectual gift of discernment alludes some if not many. The ability to discern the difference between speculation and gambling is important. Indifference to the distinctions that separate the two is likely to affect your approach to trading. Gambling occurs when there is little or no ability to analyze factors that may affect outcome whereas speculation involves identifiable factors that can be analyzed. For example in Blackjack one is limited to statistical outcomes of the various presentation of cards on the table and what might...
Big words with a wall of text from a big ego as usual with a hidden claim of winner behind his post. The mark of a loser who fail to recognise his $100 trading is no better than gambling. Back it up with 25% of your networth allocated to Forex trading then perhaps people might believe your bs.

For clarification, the bs analysis and decision making process made by this member is no better than gambling. Failure to recognise this fact is stubbornness due to addiction or plain stupidity.

The huge difference between him and me is I recognise and acknowledge that my bs analysis and decision making process no matter what the outcome is no better than gambling.

There is reason behind this admission of gambler's mindset. My original post was not made to criticise Forex trading or traders.
I think its time to cut to the chase here

A great author can write the perfect story about winning the world cup final, the heavy weight boxing title, beating usain bolts 100m record and the list goes on

But can that great author score a hatrick against brazil and lift the world cup above their head, knock out ali or tyson, run faster than 9.58 seconds over 100m

Words are meaningless without something to back it up, without real actual proof you will always be the doubt in the other persons head
On Point All Time Return: -52.9%
Quoting Wags
I think its time to cut to the chase here A great author can write the perfect story about winning the world cup final, the heavy weight boxing title, beating usain bolts 100m record and the list goes on But can that great author score a hatrick against brazil and lift the world cup above their head, knock out ali or tyson, run faster than 9.58 seconds over 100m Words are meaningless without something to back it up, without real actual proof you will always be the doubt in the other persons head
We have to admit they are good at writing.
Quoting BWilliam
{quote} We have to admit they are good at writing.
Some better than others
On Point All Time Return: -52.9%
Quoting BWilliam
{quote} Big words with a wall of text from a big ego as usual with a hidden claim of winner behind his post. The mark of a loser who fail to recognise his $100 trading is no better than gambling. Back it up with 25% of your networth allocated to Forex trading then perhaps people might believe your bs. For clarification, the bs analysis and decision making process made by this member is no better than gambling. Failure to recognise this fact is stubbornness due to addiction or plain stupidity. The huge difference between him and me is I recognise...
I'm not quite sure where your irrational outburst came from. Guess I hit a nerve. But I'll come back at ya' big man with his own huge ego.

I'm merely making a not so subtle point that there is a difference between gambling and speculation. Trading is speculation, not gambling. I would much rather play Black Jack if I was gambling.

I really don't care if anyone believes me so I don't need to make statements such as "back it up with 25% of your networth allocated to Forex Trading". If this type of irrational behavior is what you think you need to reveal to gain respect of others then you've got a huge problem. I would never trust anyone who risks 25% of his networth in Forex. That is gambling and quite honestly is irresponsible and I would qualify as a pretty good definition of stupidity. That kind of risk exposure is even less than gambling. Oh yeah it's just stupid!

Yep I have a $100.00 TE and damn proud of it. It's a way my live/real money trades are public and back up what I say on my thread/s. I love it when people like you criticize those with live TEs and they themselves have zero TEs. Your the one with big words and nothing else.

If what I said previously was viewed as an attack then you were mistaking but now that you have attacked me GAME ON!
Hobby Trader
No setups for me atm on my usual trades

But here is a speculation (no gamble) based on news projections first and now confirmed, no SL its small live account so will leave overnight

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On Point All Time Return: -52.9%
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