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AUD/USD

  • #46,261
  • Jun 5, 2012 2:57am Jun 5, 2012 2:57am
Quoting fosking
Mate, that's a lot to lose. Ideally it needs to be max of 2%.
pretty subjective

20% over a span of trades isn't too bad, maybe he just needs a strategy refinement but losing 20% in 1 trade is a big mistake that should be corrected first.

i personally take 2% to 3% risk per trade
  • #46,262
  • Jun 5, 2012 2:57am Jun 5, 2012 2:57am
Quoting Daytrader74
Yes but ideally it will never be always 2% !!
I should have said you need to be risking 2% each trade.
  • #46,263
  • Jun 5, 2012 2:59am Jun 5, 2012 2:59am
Quoting jayjb
losing 20% in 1 trade is a big mistake that should be corrected first.
You beat me to my correction. 2%-3% is perfect.
  • #46,264
  • Jun 5, 2012 3:01am Jun 5, 2012 3:01am
hasnt touch my line yet..
  • #46,265
  • Jun 5, 2012 3:01am Jun 5, 2012 3:01am
Quoting 2+2=4ex
For daytrading it makes sense. However, you can trade long term without being interested in the actual trading, so long as your interested in making money. One of the great things about trading is you can take a very hands-off approach going weeks or months without looking at your account.

But if you play with leverage 50 from Oanda with 100% capital, we will get margin call easily , how can we relax?
  • #46,266
  • Jun 5, 2012 3:04am Jun 5, 2012 3:04am
In my opinion 2% per trade is for gamblers unless of course you only maintain one or two trades at a time.

I used to do that sort of stuff.

No more.

2 trades open with a combined drawdown of 5% is crazy in my opinion... if Bank of America goes broke on a Sunday (or something similar), so do you in your account.
In the days of old when sailors were bold, and seldom if ever contented.
  • #46,267
  • Jun 5, 2012 3:05am Jun 5, 2012 3:05am
Quoting leticus
But if you play with leverage 50 from Oanda with 100% capital, we will get margin call easily , how can we relax?
Manage your risk, trade small.
In the days of old when sailors were bold, and seldom if ever contented.
  • #46,268
  • Jun 5, 2012 3:07am Jun 5, 2012 3:07am
Liticus, I get the impression you are trying to make a lot of money from this as fast as you can... good luck with that method, I guarantee you will go broke, no problem, no question, absolutely guarantee it!!
In the days of old when sailors were bold, and seldom if ever contented.
  • #46,269
  • Jun 5, 2012 3:08am Jun 5, 2012 3:08am
Quoting pt49
In my opinion 2% per trade is for gamblers unless of course you only maintain one or two trades at a time.

I used to do that sort of stuff.

No more.

2 trades open with a combined drawdown of 5% is crazy in my opinion... if Bank of America goes broke on a Sunday (or something similar), so do you in your account.
I trade one pair at a time.

I agree, you risk 2% on one trade and have 5 trades running at the same time, common sense has to kick in a little.
  • #46,270
  • Jun 5, 2012 3:09am Jun 5, 2012 3:09am
Quoting Daytrader74
Gees...take it easy its only a 20% draw down not that bad

its pretty bad for me, I agree with that. But learnt quite a bit after reading Disciplined Trader.

But it seems to me that you don't learn as much when people are telling you what to do. Now that I've done it, the materials in the book are more easily understood.
  • #46,271
  • Jun 5, 2012 3:09am Jun 5, 2012 3:09am
Quoting pt49
Manage your risk, trade small.
1% max for me. If you have a bad run it'll take a while to get back. Too many people are in too much of a hurry to go broke.
FF journal: Peaks and Troffs
  • #46,272
  • Jun 5, 2012 3:09am Jun 5, 2012 3:09am
Quoting pt49
Liticus, I get the impression you are trying to make a lot of money from this as fast as you can... good luck with that method, I guarantee you will go broke, no problem, no question, absolutely guarantee it!!

2% of the capital with what leverage?
  • #46,273
  • Jun 5, 2012 3:16am Jun 5, 2012 3:16am
Quoting fosking
I trade one pair at a time.

I agree, you risk 2% on one trade and have 5 trades running at the same time, common sense has to kick in a little.
Been there done there.

People get shrouded by greed, they think of the potential of winning 10% with 5 trades than losing 10% with 5. They look for reasons to trade, to hope and maybe get away with something.
  • #46,274
  • Jun 5, 2012 3:17am Jun 5, 2012 3:17am
Quoting leticus
2% of the capital with what leverage?
The leverage is irrelevant, YOU PLACE A MAX OF YoUR EQUITY AT RISK based on your Stoploss ...if you have one... AND YOU DON'T

If you are willing to risk 20% of your trading account equity, you must be a very wealthy man.

Leverage means nothing, you need to learn how to size your trades based on the amount of equity in your account, and how much of that you are willing to lose on this trade when you place this trade.

Go to babypips.com and learn money management.

I'm sure theres plenty of threads here on it, but sorting the crap from the chaff is not easy on FF.
In the days of old when sailors were bold, and seldom if ever contented.
  • #46,275
  • Jun 5, 2012 3:19am Jun 5, 2012 3:19am
The 2% drawdown limit is often thrown around but I think when it comes to risk management you have to put some time into creating your own rule set. For example if your strategy is to scalp 5-10 pips, 2% is a stupid number. If your strategy is to hold for a few months following broad economic trends, 2% will easily get your stopped out only to see your ideas come to fruition.

I ask two questions when choosing stop levels and position sizes. At what price does the trade become invalid?

How much am I willing to lose per month?

Say for example I am shooting for a 50pip profit target, the trade becomes invalid when the price breaks a key SR level 20 pips away from my entry. So my SL level is 20 pips away.

I am willing to lose $200 per month. This is a 1 day trade (the only trade I will put on today) therefore I am willing to lose 200/20 on this trade = $10. With a stop loss of 20 pips my position size (in AUD USD) is therefore 0.05.

Thats the way I approach it, what about you pt49?
  • #46,276
  • Jun 5, 2012 3:21am Jun 5, 2012 3:21am
Quoting alqemist
Thats the way I approach it, what about you pt49?
I agree with everything you said, but that will be double dutch to Inviticus based on his current position.
In the days of old when sailors were bold, and seldom if ever contented.
  • #46,277
  • Jun 5, 2012 3:23am Jun 5, 2012 3:23am
We don't even know what his trade/s is or are, for example... if he was long the gbp when he posted he's toast by now anyways.
In the days of old when sailors were bold, and seldom if ever contented.
  • #46,278
  • Jun 5, 2012 3:24am Jun 5, 2012 3:24am
Quoting alqemist
The 2% drawdown limit is often thrown around but I think when it comes to risk management you have to put some time into creating your own rule set. For example if your strategy is to scalp 5-10 pips, 2% is a stupid number. If your strategy is to hold for a few months following broad economic trends, 2% will easily get your stopped out only to see your ideas come to fruition.

I ask two questions when choosing stop levels and position sizes. At what price does the trade become invalid?

How much am I willing to lose per month?

Say for example I...

Hence, you are saying that you play with a stop loss of 20 pips is the way of money management regardless the trade size?
  • #46,279
  • Jun 5, 2012 3:24am Jun 5, 2012 3:24am
H4 and M15

In the last picture (M15) if the price can`t break 0.97462 will go to 0.98 so time for scalp!
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Attached Image
  • #46,280
  • Jun 5, 2012 3:25am Jun 5, 2012 3:25am
Attached Image (click to enlarge)
Click to Enlarge Name: dp1.jpg Size: 104 KB


cheers
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