Question: Take another nearly 30% of your monthly income? | Forex Factory

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Question: Take another nearly 30% of your monthly income?

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  • What would you do? Taking another nearly 30% of your monthly income in y
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  • #1
  • First Post: Nov 15, 2011 12:33pm Nov 15, 2011 12:33pm
A simple test - imagine following situation:
You have the possibility to make a bet, but you need for this bet exactly 1,000 CU (1,000 CU [currency units]=1 monthly income) if you win this bet your amount is growing for 50% - if you loose it your amount is declining for 50%.
You made this bet already for 10 times - the first 6 times you won and so your first 1,000 CU was growing to 11,390.63 CU - the last 4 bets you lost and so your amount declined to 711,91 CU. Seen that you need 1,000 CU you have to use another additional 288,09 CU for making an other bet. What would you do? Taking another nearly 30% of your monthly income in your hands or not?
Pecunia non olet
  • #2
  • Nov 15, 2011 2:39pm Nov 15, 2011 2:39pm
Quoting wm-eu
A simple test - imagine following situation:
You have the possibility to make a bet, but you need for this bet exactly 1,000 CU (1,000 CU [currency units]=1 monthly income) if you win this bet your amount is growing for 50% - if you loose it your amount is declining for 50%.
You made this bet already for 10 times - the first 6 times you won and so your first 1,000 CU was growing to 11,390.63 CU - the last 4 bets you lost and so your amount declined to 711,91 CU. Seen that you need 1,000 CU you have to use another additional 288,09 CU for making...
That was 3 losses too much.
I would have taken out the surplus after the first loss and started over at 1000 CU. Or probably earlier.
  • #3
  • Nov 15, 2011 3:00pm Nov 15, 2011 3:00pm
Quoting wm-eu
A simple test - imagine following situation:
You have the possibility to make a bet, but you need for this bet exactly 1,000 CU (1,000 CU [currency units]=1 monthly income) if you win this bet your amount is growing for 50% - if you loose it your amount is declining for 50%.
You made this bet already for 10 times - the first 6 times you won and so your first 1,000 CU was growing to 11,390.63 CU - the last 4 bets you lost and so your amount declined to 711,91 CU. Seen that you need 1,000 CU you have to use another additional 288,09 CU for making...
Here's what I would do.

Open up a tiny cash account with a bucket shop (who else would you be able to open a tiny cash account with...) for the exclusive purpose of testing all trading ideas and trading theories. Get really good at not blowing the tiny cash account and then roll your proven theory over into you much larger (multiple) production trading cash accounts.

That's what I do. I use the bucket shop for testing live trading theories, so that my brain understands that real cash was used - not a demo account. That keeps the right neurons in my brain firing off the way they should, knowing that real cash is being used. When you demo trade, you set-up a different neural network in your brain. In other words, you have a Cash Brain and a Demo Brain - and never the twain shall they meet. They are NOT the same and they will NOT provide you with the same results. The tracks you lay down in the chemistry of your brain with real cash, are different from the chemical tracks you lay down when you know the money is not real.

This will dramatically change the inputs to your Cash Brain, when you have to make that 288,09 CU decision to continue.

When real cash is on the line, people get tunnel vision and they start making irrational decisions, especially when they have not yet trained their Cash Brain to respond the way they want it to under the heat of cash trading. You might find that your entire "situation" may need to be re-engineered and re-thought before any decision about adding an extra 288,09 CU to the equation is take seriously.
Y = MX + B. The most important price level of all.
  • #4
  • Nov 15, 2011 3:56pm Nov 15, 2011 3:56pm
Quoting doblece
That was 3 losses too much.
I would have taken out the surplus after the first loss and started over at 1000 CU. Or probably earlier.
yep, you are right, but surely you know the feeling after the first loss too...i think that the general thinking is: well, 1 loss out of 7 trades is still very good and its only normal to have such a loss...
after the 2 loss the feeling is: ok, i had a second loss, but i m still running well, but i have to take care about the next trade...

my basically problem was that the leverage was too high (of course the gain/loss wasnt really 50% but somewhat between 5-10% per trade)...but luckely i can say, that my loss was very, very small in relation to the whole portfolio - but i dont like such losses :-(
Pecunia non olet
  • #5
  • Nov 15, 2011 4:06pm Nov 15, 2011 4:06pm
Quoting Line In Sand
Here's what I would do.

Open up a tiny cash account with a bucket shop (who else would you be

....

You might find that your entire "situation" may need to be re-engineered and re-thought before any decision about adding an extra 288,09 CU to the equation is take seriously.
yep, i fully agree with you

when you are trading on a demo account the trading style is much more riskier than on a small real money account.

effectively i am using a small money account too and i was doing very well on it in the last days, right now i m looking for making my money there in the next weeks/months and to make a payment to the other account when i have made enough money on the small acc.

lol - i am wondering about myself when i loose somewhat between 2-10 € on the small account, normally i wouldnt care very much about such small amounts, but on this account i get always really sad, when i have such a small loss :-)
i have to admit, that sometimes i loose my feeling for money on trading...i dont know, but i dont feel a big difference between making 10 € or 100 €, and even if i loose such amounts i dont have a big difference in my feelings.

thanks for ur post ;-)
Pecunia non olet
  • #6
  • Nov 16, 2011 8:48am Nov 16, 2011 8:48am
Simpler than a bird's brain. Would losing that money hit you hard? If yes then don't risk it.
forget about tomorrow, just steal away into the night
  • #7
  • Nov 16, 2011 12:31pm Nov 16, 2011 12:31pm
Quoting spekitox
Simpler than a bird's brain. Would losing that money hit you hard? If yes then don't risk it.
lol - that's really simple :-)
basically i wouldnt be hit hard from loosing that money (it wouldnt change my lifestyle), but i would be hit...the last time i had the feeling that it would has been better if i would have ate an additional steak and drunk another glass of wine for the money :-D
Pecunia non olet
  • #8
  • Edited 2:25pm Nov 16, 2011 2:25pm | Edited 2:25pm
Why in the hell would you play a game with a 1:1 payout unless it's purely for entrainment... like a casino? This is why most traders are losers.
  • #9
  • Nov 16, 2011 2:35pm Nov 16, 2011 2:35pm
Well what if you find a middle ground ... a bit of yes and a bit of no? Like, risk less in that game, like 500 CU and not 1000 CU for now.

And you can spend the other 500 on a yummy steak and a glass of mature red wine. Are you a PETA member too? I mean the new PETA, "P"eople "E"ating "T"asty "A"nimals. LOL. Last time I had a beef worth remembering was "bifo portugues" somewhere deep in a lusophone country in Africa.

Anyway, be careful and good luck with that risky game.

Quoting wm-eu
lol - that's really simple :-)
basically i wouldnt be hit hard from loosing that money (it wouldnt change my lifestyle), but i would be hit...the last time i had the feeling that it would has been better if i would have ate an additional steak and drunk another glass of wine for the money :-D
forget about tomorrow, just steal away into the night
  • #10
  • Last Post: Nov 17, 2011 12:28pm Nov 17, 2011 12:28pm
Quoting spekitox
Well what if you find a middle ground ... a bit of yes and a bit of no? Like, risk less in that game, like 500 CU and not 1000 CU for now.

And you can spend the other 500 on a yummy steak and a glass of mature red wine. Are you a PETA member too? I mean the new PETA, "P"eople "E"ating "T"asty "A"nimals. LOL. Last time I had a beef worth remembering was "bifo portugues" somewhere deep in a lusophone country in Africa.

Anyway, be careful and good luck with that risky game.
hmm, the problem is that i have to use 1000 CU coz this broker dont allows me to open trades below this certain number.

Yep, i am a PETA member :-D
can there be somewhat better than a good beef with a good wine??

thx
Pecunia non olet
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