Start by trading conservative or use high-risk? | Forex Factory

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Start by trading conservative or use high-risk?

  • #1
  • First Post: Mar 2, 2012 10:40am Mar 2, 2012 10:40am
Hi,

I read "Market Wizards" a few days ago and noticed that many of the successful traders interviewed in the book started trading with relative high leverage and great amount of risk. I would like to start a discussion about that topic - do you think a trader should start with a small account and with a higher risk (of course, he may whipe his account several times) or is the key to success in a conservative style of trading? By that, I mean trading with reasonable Money Management rules and betting that your consistency will lead you to success in the future.

But maybe I'm wrong and traders in the 70thies/80thies were just crazy.
  • #2
  • Mar 2, 2012 11:22am Mar 2, 2012 11:22am
Quoting CaymanTrader
Hi,

I read "Market Wizards" a few days ago and noticed that many of the successful traders interviewed in the book started trading with relative high leverage and great amount of risk. I would like to start a discussion about that topic - do you think a trader should start with a small account and with a higher risk (of course, he may whipe his account several times) or is the key to success in a conservative style of trading? By that, I mean trading with reasonable Money Management rules and betting that your consistency will lead you to success...
what is your definition for high risk and for low risk? When does it start to get high risk?
  • #3
  • Mar 2, 2012 11:28am Mar 2, 2012 11:28am
Its doable. I've taken $1K accounts and turned them in to 15-20K accounts a few times using high leverage. Done the same with online poker. Btu you obviously will be wiped out more often than not. The trouble is, when do you reduce the risk? Because inevitably, it will wipe you out. Ideally, have a large account and keep the risk/leverage at a minimum. But if you're just looking to have fun, then go for it.
There's always money in the banana stand.
  • #4
  • Mar 2, 2012 12:15pm Mar 2, 2012 12:15pm
Quoting Custos
what is your definition for high risk and for low risk? When does it start to get high risk?
There is no absolute definition, but for the purpose of this thread, I would describe high risk starting with a leverage higher than 10:1 and risking more than 10 % of your account balance at any time.

With conservative I meant trading with reasonable Money Management (low leverage and low %-risk of the account balance).

I would like to hear your opinion too.
  • #5
  • Last Post: Mar 2, 2012 12:24pm Mar 2, 2012 12:24pm
Quoting CaymanTrader
There is no absolute definition, but for the purpose of this thread, I would describe high risk starting with a leverage higher than 10:1 and risking more than 10 % of your account balance at any time.

With conservative I meant trading with reasonable Money Management (low leverage and low %-risk of the account balance).

I would like to hear your opinion too.
in general I am against high risk. However, if you have researched your method well enough and know the outliers the system can and WILL produce, then you can adjust your position size to a point where your system can produce staggering profits while not depleting your account.
But such a thing takes a lot of hard work and a bit of luck, that in the future the outliers won't get any bigger than already experienced.

I personally go a middle way.
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