Millionaire in 10 weeks & Conversation with broker | Psychology and Money Management


futures.io - futures trading strategies, market news, trading charts and platforms


Psychology and Money Management


This forum is where successful traders spend most of their time and where struggling traders never visit. The psychology and money management forum is where you learn to become a profitable day trader




 

Millionaire in 10 weeks & Conversation with broker

  #141 (permalink)

Singapore
 
Trading Experience: None
Platform: MetaTrader 4
Favorite Futures: Spot Forex
 
Posts: 63 since Dec 2018
Thanks: 2 given, 50 received

Interesting thread, but the money management is pretty basic like many posters here put it. There are alot more refined ones. If you are looking to do this I suggest you study pyramiding into trades and that allows for achieving 1 to 5 r&r on average volatility. Say for example you have 1 entry with 1 r risk, if it trends you can add 1 more entry and move your stops to the first entry's position and get 1r risk but price is increasing at 2r per 1r volatility value. Hence by moving 2r you get 3r rewards for 1r risk. 3r volatility value you will get 5r returns on 1r risk.


Btw money management like this is really old and you can see people like Jesse Livermore doing it.

Just that, you need a trading model which is really good to work it, and by trying for 10 to 1 r and r, the implied reasoning is you need a really strong trend or very good timing, just that whipsaws will kill your system, plus you need to see if the pairs volatility supports it. I can tell you by experience if you can hit a 1 to 3 r and r with a 40% to 45% accuracy rate, it's good enough. With this kinds of system you will meet alot of scratch trades.

As is common knowledge(to be debated in my opinion) the markets range 70% of the time and trends 30% of the time, so as for how many percentage are whipsaws, and are gonna chop you up, nobody knows. So you will have to handle the chops and ranges as, your entries risk and reward are defined by the volatility factor in these types of market environment, so, you may want to keep things realistic.

Btw, I can tell you, usually it's when the markets environment changes that's what gets these systems. That's when you will have to check your stats and risk of ruin to see if it's still feasible.

Why do I know this? Well I guess I have tried it before and I understood the catches to these kinds of systems and, well I didn't do as well as what I thought would(which is what you wrote in your first post), just to clue you in, the other posters ain't wrong either, they are just trying to ground you in reality.

End of the day, I guess the best focus is on trying to minimize drawdown and trying to stay afloat would be the number one priority. It's not just how much you make that matters, how much you don't lose matters more.


Last edited by CookieMonsta; July 31st, 2019 at 01:28 AM.
The following 5 users say Thank You to CookieMonsta for this post: