Quote:
Originally Posted by Jimmy Jones
This was the idea that sparked my topic. I have read in several places that most traders only trade 1 standard lot for every $50000 in their account.
Think of how long it would take to make $50,000 by only trading 1 standard lot at a time. If your money management rules say you only risk 2% of your bank roll, then to really use up all of that 2% at any giving time you would need several trades open at once (assuming you are indeed only using standard lot sizes instead of units).
However, if you are with a broker that allows trades sizes of whatever you wish, then you can always be using up the 2% you are willing to risk on every trade by adjusting your position size for each trade. It seems it would also work if you experience a losing streak. What if 1 lot (weather standard, mini or micro) ends up being more than 2% of your total bank roll?
Please don't take this as advice, I am just thinking out loud here and waiting to see some other views.
The idea I was trying to get across in my first post was the power of compounding position sizing.
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I have heard of very concervatives trading 2:1 which would be 100k:50k not only 1 lot probably when you actually traded with a pit.