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The anwser to that question "The secret of not losing anything"

  • #21
  • Feb 14, 2009 3:24pm Feb 14, 2009 3:24pm
Seriously, we Traders are paid to take risk. Anything else is bullshit.
So where is the risk in not losing anything? No Risk. So no payment.
This is only possible if you don't trade in the first place.
  • #22
  • Edited 5:15pm Feb 14, 2009 4:47pm | Edited 5:15pm
I do not view money that is in by acct as anyones but mine because I protect my profits (money). I dont protect the 'houses money' - subtle difference but important.
My view is that your only gambling if you lose and my intention is to not lose when I make my bet. There are times when my bet is not correct. I exit and dont think about it any longer after its closed. Why? Because its not my money anymore - now its the 'houses money' and again - my intention is not to protect the houses money -

Quoting tdion
we have a fundamental difference on this. for me, every dollar made beyond my initial capital level is "house money." i call it that. it is because i personally view trading as gambling. and if we were gambling in vegas, we'd call it house money. some gamblers in vegas will be more aggressive with their house money, and it is a matter of taste and personal opinion.
In trading, there is no bullshit. You either make money or you don't.
  • #23
  • Feb 14, 2009 8:07pm Feb 14, 2009 8:07pm
Quoting tdion
we have a fundamental difference on this. for me, every dollar made beyond my initial capital level is "house money." i call it that. it is because i personally view trading as gambling. and if we were gambling in vegas, we'd call it house money. some gamblers in vegas will be more aggressive with their house money, and it is a matter of taste and personal opinion.
Hi Tdion, similar as my opinion.
  • #24
  • Edited 3:38pm Feb 15, 2009 1:24pm | Edited 3:38pm
Quoting akukaya
Actually there is a secret of not losing anything..
but it always come with initial risk...but it can be minimum risk...
Martingale (or any progressive sizing method) increases risk of ruin without improving expectancy. Ultimately the result comes down to the edge provided by the strategy, and consistent sizing will achieve the same result, without the need to play Russian roulette. Martingale is merely an admission that one is unwilling to accept losses.

Survival with Martingale depends directly on the amount of money in the account. Hence withdrawing money potentially accelerates the onset of the 'death trade' that will devastate the account.
_________________________

As for the 'house money' mindset, TD hits the nail on the head. There are 'traders', who seek to profit long term from forex, and therefore see all money in the account as 'theirs'. As opposed to 'gamblers', many of whom believe that forex can not be beaten. Hence they hope for enough luck in the short term to provide them with 'house money', that gives them a 'free ride'.

Getting off topic here, sorry, but I see it as a similar mindset to those who see bringing the stoploss to breakeven as being very significant, giving them a 'free trade'. For better or worse, their focus is likewise on the short term, i.e. the current trade only, as opposed to long term P/L. Pips forfeited from would-have-been 'home run' trades ultimately have the same effect on eventual P/L as pips forfeited from losing trades, but very few folk see it this way. It represents an unwillingness to place at risk what one already has, for potentially greater gain. But from what I've read in 'Market Wizard' type books, some of the very best traders do the exact opposite, boldly adding to winning positions (when the probabilities are favorable) instead of seeking to preserve what they have gained thus far in their current trade. These traders apparently subscribe to the maxim "attack is the best form of defense": the extra pips gained will (more than) compensate for pips forfeited in losing trades in the future.
  • #25
  • Feb 15, 2009 4:03pm Feb 15, 2009 4:03pm
Quoting hanover
Martingale (or any progressive sizing method) increases risk of ruin without improving expectancy. Ultimately the result comes down to the edge provided by the strategy, and consistent sizing will achieve the same result, without the need to play Russian roulette. Martingale is merely an admission that one is unwilling to accept losses.

Survival with Martingale depends directly on the amount of money in the account. Hence withdrawing money potentially accelerates the onset of the 'death trade' that will devastate the account.
Nice post, Agreed , with 2 exceptions.

If I choose to Martingale my entry when price is going against my original plan, my focus can no longer be the original target or profit, but now focused on loss prevention. Most traders continue to add to losing positions because they will not accept the fact that their current market view is wrong and are unwilling to take a loss, clinging to hope rather than fact.

If I find myself in the market and current price action dictates my direction is wrong, I can either cut the position, or initiate a “counter trend” trade, when the market offers the opportunity, in an effort to bring the average position with in distance to average out the loss, but my focus here needs to be in rescuing the overall book from loss not seeking to largely profit from this scenario.

This mindset also has to be balanced with the ability to Martingale into profit. If I’m willing to add size to rescue I must be will to offset this additional risk with the ability to add size to increase profits when I’m on the correct side of the market. But always there must be a line in the sand where the trader will cut and run when crossed, with out exception. To stand in front of a speeding train, with the deer in the headlight look ……………… hence the death trade.

The second is a variant of consistent sizing, and is to pyramid into the trade. A trader entering a trade on retracement, and is under the view that price may reverse somewhere between a range, may stagger their entries adding larger portions at deeper levels, hence securing a better R:R for the larger adds. Down side here is the market reverses and takes off without the bulk of position limiting profit. However it would be with limited risk and I would assume that the mechanics of the edge would be geared and this taken into consideration with the Trader being satisfied with the outcome.

In regards to the overall discussion on house or my money, the Book, Net asset value which includes profit or loss of any active trade(s), is MINE.

Regards,
  • #26
  • Feb 15, 2009 4:25pm Feb 15, 2009 4:25pm
this is horrible advice, and although theoretically it makes sense, it always seems to lead to probelms. by the way, the common trader jargon is "averaging down." the idea a 1K account could be successfully used for this is laughable.... not impossible, but highly improbable.

Quoting jaws810
There is another more practicle method which is just as effective and will also require a very large account, choose a position and a profit goal for the trade then open a position anywhere, yes anywhere will work; however, a reason to choose the entry will probably let you complete the trade faster. Once the position is open lets say you go long on euro and it's not going so well open another position long when you are down 20 pips and continue to open new positions every time the market moves against you 20 more pips, and every time you open a...
  • #27
  • Feb 15, 2009 9:08pm Feb 15, 2009 9:08pm
Quoting hanover
Martingale (or any progressive sizing method) increases risk of ruin without improving expectancy. Ultimately the result comes down to the edge provided by the strategy, and consistent sizing will achieve the same result, without the need to play Russian roulette. Martingale is merely an admission that one is unwilling to accept losses.

Survival with Martingale depends directly on the amount of money in the account. Hence withdrawing money potentially accelerates the onset of the 'death trade' that will devastate the account.
_________________________...

I think it is a normal reply for martingale concept..dangerous...

yes, the normal martingale is dangerous..need lot of capital..
I do believe the martingale combine with P.A do have some edge....positive expectancy...but need to think a little out of box...

and I think I can prove this by making a simple EA.

the ideas works base on my testing..the real problem might come only from issue of broker/platform, internet connection issues, and sides issues, not the system. the system works.

i've tested on 2008 statistic, shows positive expentancy.
not to have so big capital.
2009-till feb still shows the same positive expectancy.

normal martingale is a sure blown account...need to see from different angle
  • #28
  • Last Post: Feb 16, 2009 4:17am Feb 16, 2009 4:17am
Quote
Originally Posted by Tjpld http://www.forexfactory.com/images/buttons/viewpost.gif
The secret of not losing anything is: Don't trade.


Agree too...
No trade = no risk = no Loss. Simple!
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