Slim will have a field day with this:
The Ratio:
What is the one, first, only thing you need to manage, ignore all else, Key to being a successful trader?
It is not good luck: you cannot manage luck.
It is not the big money you made today: you can lose it all back tomorrow.
It is not a huge balance: just more money to lose.
It is not balance vs. debt load (my mistake for years)
It is not any technical indicator.
It is not the following of teachings of the great traders (though Gann, Wyckoff, etc. make profitable reading).
It is not my precepts, not any system, not even my own:
It is the Ratio:
Ratio = Margin/Balance.
Keep this ratio below 40% and you will succeed, no matter what your method or tactics whatever you use sooner or later you will succeed.
If you cannot keep this ratio below 60% (probably even 50% is no good) no matter what your tactics, indicators, system balance, etc. sooner or later you will lose.
The ratio is the go, no go test of you and your system as a trader.
Keep the ratio below 40% and sooner or later, you will get used to big money days, have a huge and growing account, increase your balance vs. debt load, find that you indicators work for you, and that you will find that you are doing what the gurus, meant for you to do. I think your system then will bear a great deal of similarity to this one, but if it doesn't no matter.
The one exception to this is the use of fixed stop loss every time you trade.
If you use fixed stop loss, This ratio will always look good, terrific. One problem though. It does so at at the cost of your balance. The only ratio a fixed stop loss user need worry about is this month's balance vs. last month's balance.
Conversely in you do not use fixed stop loss Your balance will not vary like that. Which makes it no good as an early indicator. It is possible for your balance to increase right up to the time of margin call.
If you do not use stop loss, the things you do that keep the RATIO below 40%, will result sooner or later in all those other good things.
more on this later.
The Ratio:
What is the one, first, only thing you need to manage, ignore all else, Key to being a successful trader?
It is not good luck: you cannot manage luck.
It is not the big money you made today: you can lose it all back tomorrow.
It is not a huge balance: just more money to lose.
It is not balance vs. debt load (my mistake for years)
It is not any technical indicator.
It is not the following of teachings of the great traders (though Gann, Wyckoff, etc. make profitable reading).
It is not my precepts, not any system, not even my own:
It is the Ratio:
Ratio = Margin/Balance.
Keep this ratio below 40% and you will succeed, no matter what your method or tactics whatever you use sooner or later you will succeed.
If you cannot keep this ratio below 60% (probably even 50% is no good) no matter what your tactics, indicators, system balance, etc. sooner or later you will lose.
The ratio is the go, no go test of you and your system as a trader.
Keep the ratio below 40% and sooner or later, you will get used to big money days, have a huge and growing account, increase your balance vs. debt load, find that you indicators work for you, and that you will find that you are doing what the gurus, meant for you to do. I think your system then will bear a great deal of similarity to this one, but if it doesn't no matter.
The one exception to this is the use of fixed stop loss every time you trade.
If you use fixed stop loss, This ratio will always look good, terrific. One problem though. It does so at at the cost of your balance. The only ratio a fixed stop loss user need worry about is this month's balance vs. last month's balance.
Conversely in you do not use fixed stop loss Your balance will not vary like that. Which makes it no good as an early indicator. It is possible for your balance to increase right up to the time of margin call.
If you do not use stop loss, the things you do that keep the RATIO below 40%, will result sooner or later in all those other good things.