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#6 (permalink)
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Leeds UK
Trading Experience: Intermediate
Platform: FXTrade
Broker/Data: Interactive Brokers, CapitalSpreads, Oanda
Favorite Futures: GBP/USD
Posts: 429 since Apr 2015
Thanks: 1,044 given,
552
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Please excuse my confusion, but the two observations above can't be talking about the same trading method, surely? With a risk-to-reward ratio of 1:3, the longest losing run will clearly be way higher than 4 trades.
With a 25% win-rate, over a series of about 600 trades, the chances are around 50/50 that you'll have a consecutive losing run of 20 or more trades.
Not that "longest losing runs" are the real problem, anyway: "long losing patches" are far more common (by which I mean "series of consecutive results including mostly losers and a few winners which are financially equivalent in their overall outcome to a long losing run of consecutive trades").
Risking 5% of your account on a single trade would require the certainty of an enormously high win-rate to be plausible or sensible. It's not something I've ever heard of a long-term successful trader doing.
With apologies for sounding so negative (which I know I will), the ideas of (a) trading futures with a $1,000 account and (b) making a 10% daily return on your account are both absolutely "dreamworld stuff".
Neither will be anywhere near possible for you. Not now, and not in future, either.
I urge you to read a couple of beginners' trading books about the basic math of trading and position-sizing before opening even a sim account.
After that, I'd also strongly advise you not even to think of trading futures with a funded account until you've collected together and analyzed carefully (after first learning how to do so) the outcomes of an absolute minimum of 300 consecutive trades on a sim account. Whatever you think your overall win-rate and longest losing run are.
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