@simpleman
at a spread of 5 you can't do much on 5 mins. g/j is already at the limit with 3.something. You're just making your broker rich. Especially when volatility is very low; you had a less than 100 pips interval with 10 round trip cost. With low volatility, spreads/transaction costs are way higher % of potential profit so, while your success chances are the same, the costs are increased(and you pay the broker regardless of being successful or at a loss). Yes, g/a g/c are normally volatile, but yesterday vol. was crap.
And always have a stop somewhere(not as in sl, but as in a mental stop); this thing is like leverage - powerful, but also potentially lethal. And there's no reload button in this game.
Don't jump in - demo, or trade with smaller amount 1st(better trade smaller, demo is way too easy on stress, chances are you won't learn much). Otherwise, it's a good chance you'll get scared when it'll reach even half the losses you calculated you can accept and the whole strategy will go down the drain. You'll just sell at the bottom/buy at the top out of fear.
Make sure you're mentally ready to see -x%(whatever is your accepted max. loss). Write down the figure you'll have at <current acct. value> - x% and see if you accept it(before entering the trade); make sure that you understand that pressing that button(buy or sell) the 1st time might get you to <current acct. value> - x%. If you have 100k and you risk 10%, accept that, at the end of the action(which can last more than 1 day), you can have 90k(beside one week of couple of hours sleep); it's a low chance, but it's there. See if you're ok with it because sooner or later that's precisely what'll happen.
Sooner or later you'll see a figure close to it(it might look like never, but take a look at last two months than take at look at '08 - those last 2 months were mild) and if you don't stay up to x% and close sooner or you stay pass x% hoping, you'll be wiped out sooner or later(or bled to death by closing earlier outta fear).
Test rescues: I rescue with a much smaller skew than what fti argues for(3 to 5 from what I read). This is obviously worse, as it's more dangerous since I have to stay in much longer. But I know I'd get scared at 3-5 skew, so I don't try it despite seeing it's advantages; I'm just not able to. I'm rigid and defensive(hardly qualities in this endeavor, but... that's how I am, I won't change so it'd be stupid not to take my nature into acct. just because it disadvantages me).
Test rescues again and again - see that you don't get scared. There's no guarantee the rescue will be successful, but if you get scared and stop it prematurely because it doesn't go as expected, you're just throwing money out on the window.
p.s. - especially with a strategy like this(which is... the most powerful if you ask me) understand you'll lose; big. Sooner or later; that's not a problem as long as you make more than you lose, but be sure it'll happen. So take a good look at that "withdraw funds" button and use it from time to time under such strategy. It's... a very useful button since compounding goes both ways
and the danger getting 2-3 losses in a row(on paper, if you don't know statistics it seems like a nigh on impossible occurrence) is very real.
It's the worst strategy to try live from the start with full risks; especially if you're pretty good at trading. Chances are there'll be months till the 1st real test(yesterday was extremely easy - look at next week calendar - things were rangebound) and when it'll come, you already forgot what you had to do, your ego is totally inflated due to previous successful months and you'll treat the whole situation with contempt until you see the acct. value halved, moment when you'll sell the bottom.
Depending on your nature, it might never get easy; I find a protracted defence as mind wrecking as I always did - it never got better. But some routine will set in; it'll still be bitter, still nerve wrecking, but you'll know you have to take the pill and routine will partially take over and allow you to stay instead of running(oversizing the rescue attempt so you get out earlier also counts as running - to be fair, actually it counts as trading with hope, much worse than running).
pps -
at a spread of 5 you can't do much on 5 mins. g/j is already at the limit with 3.something. You're just making your broker rich. Especially when volatility is very low; you had a less than 100 pips interval with 10 round trip cost. With low volatility, spreads/transaction costs are way higher % of potential profit so, while your success chances are the same, the costs are increased(and you pay the broker regardless of being successful or at a loss). Yes, g/a g/c are normally volatile, but yesterday vol. was crap.
And always have a stop somewhere(not as in sl, but as in a mental stop); this thing is like leverage - powerful, but also potentially lethal. And there's no reload button in this game.
Don't jump in - demo, or trade with smaller amount 1st(better trade smaller, demo is way too easy on stress, chances are you won't learn much). Otherwise, it's a good chance you'll get scared when it'll reach even half the losses you calculated you can accept and the whole strategy will go down the drain. You'll just sell at the bottom/buy at the top out of fear.
Make sure you're mentally ready to see -x%(whatever is your accepted max. loss). Write down the figure you'll have at <current acct. value> - x% and see if you accept it(before entering the trade); make sure that you understand that pressing that button(buy or sell) the 1st time might get you to <current acct. value> - x%. If you have 100k and you risk 10%, accept that, at the end of the action(which can last more than 1 day), you can have 90k(beside one week of couple of hours sleep); it's a low chance, but it's there. See if you're ok with it because sooner or later that's precisely what'll happen.
Sooner or later you'll see a figure close to it(it might look like never, but take a look at last two months than take at look at '08 - those last 2 months were mild) and if you don't stay up to x% and close sooner or you stay pass x% hoping, you'll be wiped out sooner or later(or bled to death by closing earlier outta fear).
Test rescues: I rescue with a much smaller skew than what fti argues for(3 to 5 from what I read). This is obviously worse, as it's more dangerous since I have to stay in much longer. But I know I'd get scared at 3-5 skew, so I don't try it despite seeing it's advantages; I'm just not able to. I'm rigid and defensive(hardly qualities in this endeavor, but... that's how I am, I won't change so it'd be stupid not to take my nature into acct. just because it disadvantages me).
Test rescues again and again - see that you don't get scared. There's no guarantee the rescue will be successful, but if you get scared and stop it prematurely because it doesn't go as expected, you're just throwing money out on the window.
p.s. - especially with a strategy like this(which is... the most powerful if you ask me) understand you'll lose; big. Sooner or later; that's not a problem as long as you make more than you lose, but be sure it'll happen. So take a good look at that "withdraw funds" button and use it from time to time under such strategy. It's... a very useful button since compounding goes both ways
and the danger getting 2-3 losses in a row(on paper, if you don't know statistics it seems like a nigh on impossible occurrence) is very real.
It's the worst strategy to try live from the start with full risks; especially if you're pretty good at trading. Chances are there'll be months till the 1st real test(yesterday was extremely easy - look at next week calendar - things were rangebound) and when it'll come, you already forgot what you had to do, your ego is totally inflated due to previous successful months and you'll treat the whole situation with contempt until you see the acct. value halved, moment when you'll sell the bottom.
Depending on your nature, it might never get easy; I find a protracted defence as mind wrecking as I always did - it never got better. But some routine will set in; it'll still be bitter, still nerve wrecking, but you'll know you have to take the pill and routine will partially take over and allow you to stay instead of running(oversizing the rescue attempt so you get out earlier also counts as running - to be fair, actually it counts as trading with hope, much worse than running).
pps -
For traders of retail Forex, most of our calculus would be unacceptable.
As Leighsww may have mentioned , that I did a demo experiment and I doubled a 50,000 account in 24 trades trading sparingly with a 100% R/R.
I later did a risk to ruin analysis and found it unacceptable.
So I opened another account and did the trade to acceptable Risk of ruin,
and made average 1.30 cts a day, which humoured Leighsww till she was rolling on floor.
Sometimes over a 24 hr period I made 30 cts.
I am now using a 100,000 account with increased ruin factor and am still experimenting daily to find that equilibrium.
Just for info, I have now factored implied volitility into the formulation.
So in fact I am yet inconclusive.
regards
great form: rofl: laughing all the way there doing the mambo, huh?
