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  • #21
  • Nov 27, 2015 6:56am Nov 27, 2015 6:56am
Quoting hamedmohd
how to reduce the risk on the trading.
I agree with all of you.
Here are my options:

1. Reduce the size of the lot
2. Stop-loss at right place
3. Don't recede from trading plan
4. MM
5. Don't trade during NFP
6. Don't trade with a strong market volatility
7. Analytics
If trading for example MH TF, it's certainly profitable, but need more money and very high risks...
  • #22
  • Nov 27, 2015 11:08am Nov 27, 2015 11:08am
Quoting alphaomega
{quote} Hi, superjolt Yes, I personally manage my money this way, and I know a few other pro traders (much bigger than me in terms of capital) who use similar MM system. Of course many different variations can be applied, different risk parameters,.... but the core principle always stays the same. I know that you understand mathematics/logic (and programming) and probably you can see why this method is superior in many ways compared with other methods. The interesting thing is that I have never seen this in any book about trading, and I have never...
It does fit my way of thinking that's for sure... what you're suggesting makes complete sense and I plan to use this method of MM going forwards. I'll let you know how I get on!
  • #23
  • Nov 27, 2015 11:49am Nov 27, 2015 11:49am
About Alpha's plan, what periods do those "leveraged double the account" goals take to reach on average ?
I don't need easy. I just need possible.
  • #24
  • Nov 27, 2015 4:28pm Nov 27, 2015 4:28pm
Quoting DaGrizlyBull
About Alpha's plan, what periods do those "leveraged double the account" goals take to reach on average ?
There is no set time frame! How long is going to take is relative and depends on multiple factors:

1. Your skill level (this is the most important)
2. The level of risk (how much leverage are you going to use)
3. The market conditions (fast market , slow market, volatility, news )
4. How good is your broker/platform, execution speed, cost of trading, spread/commissions. (these factors are also very important)

Just for example:
Start with 100
average leverage per trade 20:1 (0.20 per pip)
doubling after 500 pips(net after commisions)
if you can make average 10 pips daily , doubling time = 50 days
if you can make average 20 pips daily , doubling time = 25 days
if you can make average 40 pips daily , doubling time = 12,5 days
-------------------------------
You get the point?
Consistency , constant cash flow and NO excuses! This is how almost all professional traders trade. No one cares about the long term trends (no overnight positions).
The intraday action is what matters.
  • #25
  • Nov 27, 2015 7:13pm Nov 27, 2015 7:13pm
Quoting alphaomega
{quote} There is no set time frame! How long is going to take is relative and depends on multiple factors: 1. Your skill level (this is the most important) 2. The level of risk (how much leverage are you going to use) 3. The market conditions (fast market , slow market, volatility, news ) 4. How good is your broker/platform, execution speed, cost of trading, spread/commissions. (these factors are also very important) Just for example: Start with 100 average leverage per trade 20:1 (0.20 per pip) doubling after 500 pips(net after commisions) if you...
where is the risk in your equation? make 10 pips a day sounds good, but lose 40 one day, you gotta make 60 the next, doesn't sound that easy anymore

what about opportunities? do you have plenty everyday? what about losing streaks? etc. etc.

risk isn't about money at risk or leverage alone, its part of the whole RRR, profit factor, opportunities and leverage shebang, leave aside psychological, counter party risk and black swan events

this number counting is rookie thinking at it's finest, aim for proficiency instead
Invincibility lies in the defence, the possibility of victory in the attack
  • #26
  • Nov 27, 2015 7:45pm Nov 27, 2015 7:45pm
Quoting silverheat
{quote} where is the risk in your equation? make 10 pips a day sounds good, but lose 40 one day, you gotta make 60 the next, doesn't sound that easy anymore what about opportunities? do you have plenty everyday? what about losing streaks? etc. etc. risk isn't about money at risk or leverage alone, its part of the whole RRR, profit factor, opportunities and leverage shebang, leave aside psychological, counter party risk and black swan events this number counting is rookie thinking at it's finest, aim for proficiency instead
You got it wrong...... maybe you should just read more carefully before commenting!
I'm talking about AVERAGES! (no rookies here)

Example :

day 1
total trades 10
net p/l -20 pips

day 2
total trades 8
net p/l +60 pips
-----------------------------
2 trading days , net result + 40 pips (20 pips per day)

I'm doing the same type of calculation on weekly, monthly, quarterly and yearly basis.....
  • #27
  • Nov 27, 2015 8:03pm Nov 27, 2015 8:03pm
Quoting alphaomega
{quote} You got it wrong...... maybe you should just read more carefully before commenting! I'm talking about AVERAGES! (no rookies here) Example : day 1 total trades 10 net p/l -20 pips day 2 total trades 8 net p/l +60 pips ----------------------------- 2 trading days , net result + 40 pips (20 pips per day) I'm doing the same type of calculation on weekly, monthly, quarterly and yearly basis.....
i see that, what i am saying is aiming for numbers puts you in the wrong mindframe and limiting your risk by just using 100$ accounts doesn't make you a better trader
Invincibility lies in the defence, the possibility of victory in the attack
  • #28
  • Nov 27, 2015 8:32pm Nov 27, 2015 8:32pm
Quoting silverheat
{quote} i see that, what i am saying is aiming for numbers puts you in the wrong mindframe and limiting your risk by just using 100$ accounts doesn't make you a better trader
Who talks about mind frames here? $100? This is just example....... Seriously, read carefully, and you might learn something! (You may save yourself from a lot of trouble in the future!)
This is THE BEST WAY to limit risk. You should NEVER put your whole trading capital inside a broker/trading account! Yeah, maybe if you manage just a few thousand it's not a problem....
But when you manage over 100k ,500K, 1M? What if the broker goes bust tomorrow? These money are not insured! AND you don't earn anything on them, they will just sit in cash inside your broker. What's the point?
It's much better put only 5-10% inside the trading account and just use higher leverage. Then park the rest inside your bank to earn some interest or even better, buy some blue chip stocks, or A+bonds and earn extra cash. This is how I do it, and this is how ALL professional traders do it....
  • #29
  • Nov 27, 2015 9:34pm Nov 27, 2015 9:34pm
You can decrease your risk of ruin by taking on more risk exposure.
  • #30
  • Edited 2:21am Nov 28, 2015 1:54am | Edited 2:21am
Quoting alphaomega
How to reduce the risk in trading? The easiest way to reduce the risk is to trade very small size! Or to stop trading altogether.(this way you will never lose a single cent) But if you want to make money (big money) with low risk, there is only one way! Follow these steps: 1. You need good accuracy in order to manage the risk well, and you need high trading frequency in order to accumulate and compound your capital...
Spot on Alpha, you lay it down clearly. Just two points to add, the leverage comes down as the capital goes up to reduce the exposure to risk of ruin. And the net profit pips per trade need to go up as the lot size increases to accomodate larger sl. Hence as the capital grows and our trading experience/expertise increases we can no longer trade the small scrap moves with high leverage but migrate to trade the larger intraday swing moves on reduced leverage.
  • #31
  • Nov 28, 2015 3:39am Nov 28, 2015 3:39am
Quoting silverheat
you don't reduce risk in trading, risk reduces you
...or your money...
Money is made by sitting, not trading. Jesse L. Livermore
  • #32
  • Nov 28, 2015 5:45am Nov 28, 2015 5:45am
Quoting alphaomega
{quote} Who talks about mind frames here? $100? This is just example....... Seriously, read carefully, and you might learn something! (You may save yourself from a lot of trouble in the future!) This is THE BEST WAY to limit risk. You should NEVER put your whole trading capital inside a broker/trading account! Yeah, maybe if you manage just a few thousand it's not a problem.... But when you manage over 100k ,500K, 1M? What if the broker goes bust tomorrow? These money are not insured! AND you don't earn anything on them, they will just sit...
Hey Alpha,

Thanks for the response. I was wondering where u can find these 50$-100$ brokers for deposits, aren't they shady usually? What i found are minimum 1K/5K deposits.

Also, do you know from what lot size there start to be liquidity issues/slippage/etc for the majors (EU/GU/UJ/AU), since this will put a cap on compounding if your plan is to risk x % per trade and compound.

If the question is not clear, what i mean is if liquidity problems appear at lets say 10 lots (1 million base currency units), and i have a SL of 10 pips on UJ, my risk is around 10 * 100$ = 1.000$ (disregarding commissions for now) . With a 100% leverage, this means if i max leverage, i cannot risk more than 1% for accounts of 100.000$ or more , 2% for 50.000% or more , etc . (I cannot leverage anymore to fit the x% risk to my SL size)

Edit: Or simply put, from what lotsize i cannot compound anymore and i will risk that amount as maximum every trade . ^^

Thank you !
I don't need easy. I just need possible.
  • #33
  • Nov 28, 2015 9:00am Nov 28, 2015 9:00am
Quoting DaGrizlyBull
{quote} Hey Alpha, Thanks for the response. I was wondering where u can find these 50$-100$ brokers for deposits, aren't they shady usually? What i found are minimum 1K/5K deposits. Also, do you know from what lot size there start to be liquidity issues/slippage/etc for the majors (EU/GU/UJ/AU), since this will put a cap on compounding if your plan is to risk x % per trade and compound. If the question is not clear, what i mean is if liquidity problems appear at lets say 10 lots (1 million base currency units), and i have a SL of 10 pips on UJ,...
If you just want to play with small sums(micro accounts), and to apply/practice this type of money management, you can just use broker who offers internal wallet with free online transfers between accounts ( many brokers offer this)

For the leverage, some brokers may cap your level down to 30:1 max if you trade very large volumes(over 10 mil per trade). but there is very easy fix for this! You can just split the money into multiple smaller accounts between several different brokers, and manage them simultaneously through a trade copier/master account. Most big traders trade this way. This is also another very good way to reduce risk in trading......

As far as liquidity, I don't think you are going to have any problems anytime soon. Especially If you stick to the major pairs. During EU/US trading hours, for trade size below 10 mil easily you get fills within 0.5 pips, and for up to 30-50 mil. per trade you can easily get a fills within 1-2 pip range. Also if you trade such large volumes most brokers will start to pay you rebates, or you can negotiate lower commission rates. So the cost of trading actually goes down when you trade large size. For example, most retail brokers charge you around $25-$35 per 1 mil. traded. On large scale (institutional level volume) the commissions go down to wholesale rates. $10-15 per mil. and even lower.
  • #34
  • Nov 28, 2015 9:32am Nov 28, 2015 9:32am
Tyvm Alpha !
I don't need easy. I just need possible.
  • #35
  • Nov 28, 2015 1:02pm Nov 28, 2015 1:02pm
Nice discuss around there
My self i guess these are essential and may be superb.
trading plan
Consistency
Same lot size
R.R at least 1:1
0nly one pair.
Cheers....
Trade fearless not careless...
Syed Mohsin Ali Profit This Month: -392
  • #36
  • Nov 28, 2015 1:21pm Nov 28, 2015 1:21pm
Quoting mohsinali
Nice discuss around there My self i guess these are essential and may be superb. trading plan Consistency Same lot size R.R at least 1:1 0nly one pair. Cheers....
Same lot size: why? If one trade is more promising than another why shouldn't I put on more risk? Or the other way around if I am not entirely sure that this trade will work out (but it still has a positive expectancy) shouldn't I risk a smaller amount than usual?
R.R at least 1:1: RR and win rate are 2 variables that should not be looked at separately. How does a RR of 1 reduce risk?
  • #37
  • Nov 28, 2015 5:53pm Nov 28, 2015 5:53pm
Quoting avover
why are people keep ignoring the mechanism of this twisted financial Market ? The most efficient way to trade , is to make use of the best STOPHUNTERS ! Place a trade on the most efficient STOPHUNTERS, and place an counter position on a less efficient one . For example , buy 0.1 @ 1.5013 , [email protected] at FxYZ.com ( the most efficient stophunters for example) , sell 0.5 @ 1.5013 , TP @1.5000 at ABCD.com (a less efficient one) . The only risk ,is that the FxABDC.com may ban your account due to some bullshit reasons
lol. seriously? wow!
Shit Happens
  • #38
  • Nov 28, 2015 7:29pm Nov 28, 2015 7:29pm
Quoting avover
why are people keep ignoring the mechanism of this twisted financial Market ? The most efficient way to trade , is to make use of the best STOPHUNTERS ! Place a trade on the most efficient STOPHUNTERS, and place an counter position on a less efficient one . For example , buy 0.1 @ 1.5013 , [email protected] at FxYZ.com ( the most efficient stophunters for example) , sell 0.5 @ 1.5013 , TP @1.5000 at ABCD.com (a less efficient one) . The only risk ,is that the FxABDC.com may ban your account due to some bullshit reasons
I luv it. I have heard a similar principle being applied to hedging between brokers to take advantage of swap (traditional account vs Islamic account) but never considered your angle.

Have you had success with this?

I wonder whether there is much arbitrage potential in spreads as well possibly between different brokers. Obviously we would be dealing with quite large position sizes to take advantage of any small aritrage difference. :-)
  • #39
  • Nov 28, 2015 7:57pm Nov 28, 2015 7:57pm
Quoting Copernicus
{quote} I luv it. I have heard a similar principle being applied to hedging between brokers to take advantage of swap (traditional account vs Islamic account) but never considered your angle. Have you had success with this? I wonder whether there is much arbitrage potential in spreads as well possibly between different brokers. Obviously we would be dealing with quite large position sizes to take advantage of any small aritrage difference. :-)
I have never done this Islamic swap arbitrage thing. but....Back in 2005-2006 I made a killing with latency arbitrage during news releases(mostly during NFP and interest rate decisions) Back then, most retail brokers had fixed spreads even during news....and many of them had very crappy servers. In some cases I have seen prices lagging up to 15 sec. It was wonderful time......but most of these bucket shops are not around anymore (for obvious reasons) you cannot find such opportunities anymore. Now everyone uses co-location in data centers and prices are perfectly synchronized everywhere. Even if you find some small opportunity somewhere, it's very hard(impossible?) to exploit them.
  • #40
  • Nov 28, 2015 8:29pm Nov 28, 2015 8:29pm
Quoting alphaomega
{quote} I have never done this Islamic swap arbitrage thing. but....Back in 2005-2006 I made a killing with latency arbitrage during news releases(mostly during NFP and interest rate decisions) Back then, most retail brokers had fixed spreads even during news....and many of them had very crappy servers. In some cases I have seen prices lagging up to 15 sec. It was wonderful time......but most of these bucket shops are not around anymore (for obvious reasons) you cannot find such opportunities anymore. Now everyone uses co-location in data...
Thanks AO. I half suspected as much..*drats*.. :-)
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