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Make Millions Trading Fx

  • #201
  • Aug 23, 2010 10:38am Aug 23, 2010 10:38am
Quoting patmarch
Call me Pinochet if you will

I think that this 2% risk is nothing more than a lazy minded uninformed way to put in a nutshell the complex part of trading that is position sizing...and once accepted by the majority becomes the comfortable cornerstone of a fear munger squad that praise the good of not risking enough and/or the evil of risking too much without defining anything. If people don't want to go through the process of calculating their optimal risk parameters...then yes, 2% should do the job...but keep in mind that if you actually do...
You're right when you said that itīs not a rule in stone...In fact I'm using less than 2% in each order and trade 2 or 3 pairs at same time. And that's ok for me and my system. There isn't "one size fits all" in fx
  • #202
  • Aug 23, 2010 2:46pm Aug 23, 2010 2:46pm
Quoting clinicomp
Just to complete the idea, I think % of win isn't the complete story, the r/r is the other part. If your winners are ie 2:1 even a worst % of win makes you profitable. Like always, just my opinion
Very true.

My bad, I am so accustomed to 1:1 r/r that skipped to mention this in the risk scenario. My sixty winners generate no more than 20% because of this r/r (60-40 = 20) and therefore risking more than 1% does not work for me with my 60/40 win/loss ratio. Traders working with a different r/r and having a different success ratio will calculate different risk %.

Thanks for pointing out for the benefit of all.

ps. Other two things to consider are frequency of trades and the timeframe. It will be a very disappointing situation for one to enter 4 trades a year just to experience a BE with two winners and two losers
The Thief of Wall Street
  • #203
  • Edited 4:08pm Aug 23, 2010 3:43pm | Edited 4:08pm
Quoting patmarch
Call me Pinochet if you will

I think that this 2% risk is nothing more than a lazy minded uninformed way to put in a nutshell the complex part of trading that is position sizing...and once accepted by the majority becomes the comfortable cornerstone of a fear munger squad that praise the good of not risking enough and/or the evil of risking too much without defining anything. If people don't want to go through the process of calculating their optimal risk parameters...then yes, 2% should do the job...but keep in mind that if you actually...
I think risking 1%, 2%, 2.5% or 5% norm established due to high leverage factor in FX because of limited fluctuations in currency prices. Same is the reaon for setting PIP (Percentage In Points) as a measure of currecny price fluctuations. But one should always remember currencies can and also do move in Percentage terms.

Leverage is available because of limited fluctuations in the currencies as compared to their prices and therefore it would be prudent not to burn trading account by using the leverage as a free loan.

Another limiting factor is margin requirment, losing a significant portion of trading account drastically affects one's trading capacity and loss recovery. With limited trading capacity one would need to cover pips times more than number of pips lost.
The Thief of Wall Street
  • #204
  • Jan 15, 2011 9:19pm Jan 15, 2011 9:19pm
Quoting Chicky
I think risking 1%, 2%, 2.5% or 5% norm established due to high leverage factor in FX because of limited fluctuations in currency prices. Same is the reaon for setting PIP (Percentage In Points) as a measure of currecny price fluctuations. But one should always remember currencies can and also do move in Percentage terms.

Leverage is available because of limited fluctuations in the currencies as compared to their prices and therefore it would be prudent not to burn trading account by using the leverage as a free loan.

Another limiting factor...
Nice thread Chicky, your first post reminds me very much of when I first started trading...

I had just read "trading in the zone" and bought a 4H bollinger band method off the net. I'd never heard of Forex Factory and I was trading GBY/JPY with a 16 pip spread (no joke! Can you imagine)

As I said I was new and didn't know any better.

Long story short I managed to profit consistently in my first 4 weeks of trading. I had heaps of trades as well. I simply waitined for my signal, and followed the Sl and exit rules. I was a machine! And as crappy as the system prob was being sold on the internet and all, through my shere ignorance I was able to get in many big trades.

Anyway fast forward a few years and as I learnt more, the more CONTROL I felt I not only needed but because I knew more by then I guess I felt that I should have been making more, or have a higher win rate etc.

The more you "feel" these sort of things the more emotion is involved in a trade and the bigger ego hit you take when you're wrong etc etc and we can all imagine where this story ends

Anyway nice little trip down memory lane there, thanks for reiterrating a few things that I learnt the hard way a while ago.
Time hides Nothing
  • #205
  • Jan 15, 2011 11:40pm Jan 15, 2011 11:40pm
I do not limit myself to mere millions.
  • #206
  • Dec 2, 2013 10:24pm Dec 2, 2013 10:24pm
Nice 7 questions in Post #1.
Best time to plant a tree was 20 years ago, second best is now
  • #207
  • Last Post: Dec 2, 2013 11:06pm Dec 2, 2013 11:06pm
Quoting Chicky
thoughts in the manner that may attract some attention.
Goal #1 achieved ! Congrats !!!!
When the Joker is in the deck.. fear not and play it well
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