At what point would you increase your stake size? | Forex Factory

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At what point would you increase your stake size?

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  • When should I increase my invested Capital after consistent gains?
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  • #1
  • First Post: May 17, 2011 11:02am May 17, 2011 11:02am
So I would like to ask some of the more experienced and relatively successful traders in here a question...At what point would you increase your stake size (if possible) if youve shown yourself a 43% return in 2 months on your initial investment?

about me- Ive traded for more than 5 years consistently, spent countless hours and weekends studying charts and fundies, Ive hit a point where Im very consistent trading LIVE, but its only now been about 2 and a half months of live trading with great returns.

So with these returns Im getting now, should I wait it out for more time history and see if Im still consistent, or go with it now while im hot?

ill post my Live trade logs later, Im at work now and have no access to it

thx
  • #2
  • May 17, 2011 11:12am May 17, 2011 11:12am
Quoting bullish84
So I would like to ask some of the more experienced and relatively successful traders in here a question...At what point would you increase your stake size (if possible) if youve shown yourself a 43% return in 2 months on your initial investment?

about me- Ive traded for more than 5 years consistently, spent countless hours and weekends studying charts and fundies, Ive hit a point where Im very consistent trading LIVE, but its only now been about 2 and a half months of live trading with great returns.

So with these returns Im getting now, should...
Well, just increase your stakes with each profit made. I wouldn't invest more capital. If you really can pull off such returns, you gonna be a millionair in no time. After 2 years you gonna have 5 million $, if you start with a 1000$ account and have a consistent 43% return on a monthly basis.
  • #3
  • May 17, 2011 11:47am May 17, 2011 11:47am
Quoting Custos
Well, just increase your stakes with each profit made. I wouldn't invest more capital. If you really can pull off such returns, you gonna be a millionair in no time. After 2 years you gonna have 5 million $, if you start with a 1000$ account and have a consistent 43% return on a monthly basis.
Well let me put it in perspective, its been 2 months of a TOTAL 43% gain to date. I have increased my capital with my profits, but Im not trading a 5 or 6 figure account to really make some profit with that I could draw income off of....

My real concern lies in the fact that although I am consistent now, is 2 months enough time to really put some more cash behind it?

I have the option to trade with a 5 or 6 figure account from my Roth, should I go for it now or wait more until I have more monthly consistent gains?

thx for the replies, look forward to more!!!
  • #4
  • May 17, 2011 11:53am May 17, 2011 11:53am
Also, even with my newly gained profits I run a conservative trading approach and I cant without violating my rules, increase my leverage for now...I would need to have more $ to increase lot size and contract size, and from where im at now its gonna take a while longer.
  • #5
  • May 17, 2011 11:57am May 17, 2011 11:57am
Quoting bullish84
Also, even with my newly gained profits I run a conservative trading approach and I cant without violating my rules, increase my leverage for now...I would need to have more $ to increase lot size and contract size, and from where im at now its gonna take a while longer.
If you are absolutely sure that your approach works and will work in the future, then do it. If you are still uncertain, then I wouldn't increase the size yet.
  • #6
  • May 17, 2011 11:59am May 17, 2011 11:59am
I'm with Custos. You say you are trading a very conservative approach, let's say for example's sake you are risking 0.5% per trade buying 5 lots. Would it be crazy to double your risk (again, this is just an example-- not saying you need to actually double!) and be trading 1% a trade with 10 lots?

I mean I don't think you have to go from trading 1 lot to 20 lots in a day, surely you can make some small increases and see how it goes?

And theoretically, if it does go well, you are going to build your account balance faster which will allow you to trade at higher leverage while keeping risk low...
  • #7
  • May 17, 2011 12:09pm May 17, 2011 12:09pm
Quoting bullish84
Well let me put it in perspective, its been 2 months of a TOTAL 43% gain to date. I have increased my capital with my profits, but Im not trading a 5 or 6 figure account to really make some profit with that I could draw income off of....

My real concern lies in the fact that although I am consistent now, is 2 months enough time to really put some more cash behind it?

I have the option to trade with a 5 or 6 figure account from my Roth, should I go for it now or wait more until I have more monthly consistent gains?

thx for the replies, look...
This is a tough question for anyone to answer without knowing what is your method/strategy and mindset. My initial reaction for advice is continue trading your current balance before adding more; only because you said you've been trading live for 2 months only. However, who am I to suggest what you should do with your money when again I don't know what your goals and strategies are. The only thing I will advise is to make sure you know what you are doing before you do it. Know your risk. If you want to make money, then never ever risk your capital if you don't fully understand all of the risks.
  • #8
  • May 17, 2011 12:15pm May 17, 2011 12:15pm
I hear what you guys are saying (custos & smittens), I reckon that I could increase my lot size in small increments eventually.

But lets say for arguments sake, that one would not want to wait to build a sufficient account size to trade more respectable lot sizes, assuming monthly gains when would you or if you would increase capital to trade larger sizes to make a living from?
  • #9
  • May 17, 2011 12:17pm May 17, 2011 12:17pm
The only person that can answer this is you... Seeing as you felt the need to make this thread that is probably your answer right there. Wait until you don't feel the need to ask a consensus of unprofitable traders for their opinion on your own affairs. Think of it like a business and not your personal lonely trading account and the answer should be obvious. And if doubt... Stay out... or something like that
Time hides Nothing
  • #10
  • May 17, 2011 12:22pm May 17, 2011 12:22pm
Quoting 2+2=4ex
This is a tough question for anyone to answer without knowing what is your method/strategy and mindset. My initial reaction for advice is continue trading your current balance before adding more; only because you said you've been trading live for 2 months only. However, who am I to suggest what you should do with your money when again I don't know what your goals and strategies are. The only thing I will advise is to make sure you know what you are doing before you do it. Know your risk. If you want to make money, then [u]never ever risk...
I hear ya 2+2, good advice you gave. My initial thought was to wait until I have more of a sample size in my time period in live trading to then base a further recommendation of adding to my capital.

I swing trade divergences on the hourly charts in the direction of momentum and trend, now question is 2+2, when would you think is sufficient time? 3months? 6 months or a year?
  • #11
  • May 17, 2011 12:27pm May 17, 2011 12:27pm
Quoting CindyXXXX
The only person that can answer this is you... Seeing as you felt the need to make this thread that is probably your answer right there. Wait until you don't feel the need to ask a consensus of unprofitable traders for their opinion on your own affairs. Think of it like a business and not your personal lonely trading account and the answer should be obvious. And if doubt... Stay out... or something like that

Well ive been on the cusp for a little time now in making that decision, however I just wanted to get some suggestions to see from the eyes of a third party to get a better perspective if any

Question is if it was you, and all esle being equal, would you wait?.....I have so far, just wanted ideas or suggestions

thanks
  • #12
  • May 17, 2011 12:32pm May 17, 2011 12:32pm
Quoting bullish84
Well ive been on the cusp for a little time now in making that decision, however I just wanted to get some suggestions to see from the eyes of a third party to get a better perspective if any

Question is if it was you, and all esle being equal, would you wait?.....I have so far, just wanted ideas or suggestions

thanks
Well if it were me I would have an accepted risk level and increase or decrease my lot size according to a % of my account. Other people adjust by the week, others by the month...

You say you need more $ to increase lot size?> You must be trading standard lots?... What about micro lots? Much more flexible in this regard. Or are you risking a high % per trade?

Anyway that's what I'd do cause that's just how I trade.. Like I said the the best answer to this will come from yourself so why muddy that with a bunch of random opinions,
Time hides Nothing
  • #13
  • May 17, 2011 12:35pm May 17, 2011 12:35pm
Quoting CindyXXXX
Well if it were me I would have an accepted risk level and increase or decrease my lot size according to a % of my account. Other people adjust by the week, others by the month...

You say you need more $ to increase lot size?> You must be trading standard lots... What about micro lots? Much more flexible
I agree, I guess now the question to myself is...to compound or not to compound? lol

thanks for the perspective,makes logical sense of course
  • #14
  • May 17, 2011 12:35pm May 17, 2011 12:35pm
It's not an either/or situation as it's been described here so far. Let's say you have a 5k account and another 10k to add. Simply add 1k next week, trade for 2 weeks and see how it goes. If it goes well, then add another 20% of your account size, let's say 1.5k. Do this every 2-3 weeks until you get all of your capital into your account.

I can tell you from experience that large jumps in trading capital can be nerve racking. It really depends on the person, but to double, or even more, the actual dollar amount you lose per trade in one fell swoop can get to people.

Another way to do it is to base the add-ins to the account on amount of trades made, not time. So pick a reasonable number which really depends on your trading frequency. Let's say over the past two months you've made 30 trades. Again, add some money, then make another 30 trades. Assess the situation, then add more, make another 30, etc until you're all in.
  • #15
  • May 17, 2011 12:36pm May 17, 2011 12:36pm
no im trading micros...I need to increase my capital by trading or otherwise to meet initial margin requirements to trade standards...see the dilemma now?
  • #16
  • May 17, 2011 12:37pm May 17, 2011 12:37pm
Quoting Dopey
It's not an either/or situation as it's been described here so far....
HMMM....very interesting perspective, I like the ideas
  • #17
  • May 17, 2011 1:26pm May 17, 2011 1:26pm
Here is my trade logs...let me know what you guys think. keep in mind I just try to trade and get consistently get 15-30 pips per trade more or less for now.
Attached File(s)
File Type: pdf Account History Statement.pdf   23 KB | 521 downloads
  • #18
  • May 17, 2011 1:41pm May 17, 2011 1:41pm
On another note:
You know, when everything is going well, it is easy to try to trade more. The difficulty lies in extended drawdown periods. Do you know how much drawdown your approach has?

Cause drawdown will make us deviate from our trading plans and get us into even more drawdown. It is a vicious cycle. That's why I say it is so important to really really trust your method and KNOW that it will deliver profits over and over and over again. If you don't know which kind of drawdown is normal for the method, then please test it out. Returns mean nothing. Drawdowns mean everything.
If you are down 20% from let's say a million dollar or whatever you are planning as your account size. Can you handle having lost 200.000 $ and then only having 800.000 in your account? Will you stay with your plan? Or will you tend to revise it and change the plan or even make random trades to get back to the million dollars?
I think actually extended drawdown periods and your reactions in that time will give you the answer, if you are ready to trade with big amounts.
  • #19
  • May 17, 2011 1:50pm May 17, 2011 1:50pm
Quoting Custos
On another note:
You know, when everything is going well, it is easy to try to trade more. The difficulty lies in extended drawdown periods. Do you know how much drawdown your approach has?

Cause drawdown will make us deviate from our trading plans and get us into even more drawdown. It is a vicious cycle. That's why I say it is so important to really really trust your method and KNOW that it will deliver profits over and over and over again. If you don't know which kind of drawdown is normal for the method, then please test it out. Returns mean...
In my logs you will see the most Ive drawn down from my account is somewhere around 20% and it was down between 10-20% for a couple of weeks and I worked it back up, stayed with my plan and I am now where I am now. As you can see in my logs

Thats also the reason I dont like to increase my leverage, I feel that I will increase my leverage only until I have more than enough captial to do so that it will stay under my R/R rules. Thats by being patient and growing my small account or by adding more capital so I can trade how I am with a larger quantity
  • #20
  • May 17, 2011 1:57pm May 17, 2011 1:57pm
trading intraday and making consistent profit for 3 months is pretty good and should be enough

for longer term trading i would recommend min. 6 months of consistent profits record
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