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A Time Traveler and a Trade

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Trading Experience: Intermediate
Platform: Bookmap and Jigsaw DOM
Broker/Data: Stage 5 Trading
Favorite Futures: ZN
lax99's Avatar
Posts: 433 since Jun 2015
Thanks: 623 given, 809 received

bobwest View Post
Close it. If I go to zero, I can't eat. Or buy beer. Or trade.

If he said, "20% chance of losing half your net worth," would I take it? In other words, not really be broke, just knocked back a lot.... Probably I would.

You didn't give your answer, I notice.

I agree 100% with you. What I've really come to embrace is the fact that trading is about being around to see the next trade. This opportunity--while it has a positive expectancy--means that the only certain outcome is that you will lose everything. Something with a positive expectancy is only useful if you can make that same trade 100 times or 1000 times without losing everything. And with the more traders that a trader takes, the better his/her reads get, and (hopefully) their personal expectancy will increase.

I had a similar discussion a little while ago which I think follows the same lines above.

Suppose you are going to lose 8 ticks over a string of trades and that there is no way to avoid these losses.

How would you rather do it? One 8 tick loss? Two 4 tick losses? Or a combination of 12 scratches and -1s which eventually stick you -8?

Commissions obviously apply. What is more worth it for a trader? Would you take few trades and pay as little as possible in transaction fees? Or would you take as many trades as you could, pay commissions on all of them, and still end up in a drawdown?

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