Wrote an in depth article a while back regarding the two thoughts on dollars vs percent, I would encourage anyone wanting a mathematical and practical look at the two to read through that article. In an effort to not put this thread in too small of a box I have kept the door open for both methods to be discussed here and won’t force either on members here. I personally use the % risk model as the trade off is a slightly slower account growth for a much lower rate of ruin, which is essentially how many losses you can take before you blow up your account. Also keeps you above water in the recovering losses as math again works against you in this manner. A 10% loss requires a 11% profit to make up, 50% loss requires 100% profit, and 90% loss requires %1000 profit. As you go deeper in the hole it becomes much more difficult to get out of it. I believe once you lose 30% of your account, you need to stop everything and analyse your strategy, after 30% the hill gets very steep. % risk keeps you above that 30% mark much longer.[/QUOTE]
Hey Aaron, I remember this article, it was very good. My starting account was a measly $1500, now $1250 I risk 0.05 per lot, do you think this is too much? I thought it was reasonable but due to the failure of three daily trades I’m down quite a bit.
Going by my method, can you afford the loss if your trade looses? If no, then yo are risking too much. I would only use 0.01 until you have been profitable for 3 months at least.
The reason I like risking a fixed figure is because, I can risk say 2k for each trade, no matter how big/small the SL is. I suppose it is personal preference and what you feel comfortable doing as a trader to risk.
Sorry to hear you’ve had problems connecting. I would have responded sooner, but I only saw your post now. I just asked our tech support team, and they confirm that there were login issues earlier today on one of our demo servers for about 10 minutes from 9:30 to 9:40 am EST. No live accounts were affected. Other than that demo issue earlier, we’ve seen no other reports of connection issues today aside from your post.
Have you been able to log in since then? For future reference, if you ever have problems connecting, it’s best to call or chat with our 24-hour live customer support, so they help you in real time. They can tell you if there’s a problem on our end, or help you troubleshoot your connection, if that’s not the case. If necessary, they can even transfer your call to the trading desk, so you can manage your orders by phone.
[QUOTE=“adamjn;610440”]Going by my method, can you afford the loss if your trade looses? If no, then yo are risking too much. I would only use 0.01 until you have been profitable for 3 months at least.
The reason I like risking a fixed figure is because, I can risk say 2k for each trade, no matter how big/small the SL is. I suppose it is personal preference and what you feel comfortable doing as a trader to risk.
[/QUOTE]
Hey Adamjn
That makes a lot of sense and have always felt comfortable with the risk but think I should reevaluate some of the risk involved on daily TF trades. Gonna take a little time off to chill out and come back fresh headed.
Hey BA, i’m not sure I understand what you mean by .05 per lot. You are only down about 18% which is normal for any trader. Now if you were down by 18% from 1 trade, you would have a problem, haha. If you have a proven track record you should be ‘ok’ putting 3-4% down on a good quality trade. If your trading history is rocky and you don’t have a solid 6-12 months of consistent profits I think anything above 1-2% is a bad idea. Without a trading track record each trade should be about mastering your method, and less about the actual profits. That way if you are making poor trades you can keep focused on the learning part of trading, and less about how much money you are losing. With that being said I have had drawdowns of 30-40% in the past. Part in due to over-risking and other in part to just having a bad streak. But I could look back at my trading history and know that my long term edge would play out, and sure enough I had a winning streak of 8-9 trades. But you have to know yourself well enough and be honest enough to understand if you are losing because you are still learning and making mistakes, or if you are a profitable trader and your edge just isn’t playing out at the moment. Bottom line is you need to risk a small enough amount that you can survive a long streak of losses. If you have an edge you shouldn’t ever see more than a string of 10 losses, which means if you keep your risk at around 2% you should be able to survive that.
Yes, I was also having problems with it. It would letting me log into trading station and see charts, prices, etc. but when I tried to place an order it would tell me that my account information wasn’t able to load. I kept at it for a while and it finally started working again, although I missed out on some pips sad face
This makes perfect sense. One thing I would like to add to it is risk:reward.
I know some of my IB trades don’t have the best R:R, but 93% of the time, they hit TP (Figure not made up)
If you are taking bad R:R trades, as Aaron said earlier, it will take a lot more trades to make back one loss, so that is another thing to think about.
Hey BA, i’m not sure I understand what you mean by .05 per lot. You are only down about 18% which is normal for any trader. Now if you were down by 18% from 1 trade, you would have a problem, haha. If you have a proven track record you should be ‘ok’ putting 3-4% down on a good quality trade. If your trading history is rocky and you don’t have a solid 6-12 months of consistent profits I think anything above 1-2% is a bad idea. Without a trading track record each trade should be about mastering your method, and less about the actual profits. That way if you are making poor trades you can keep focused on the learning part of trading, and less about how much money you are losing. With that being said I have had drawdowns of 30-40% in the past. Part in due to over-risking and other in part to just having a bad streak. But I could look back at my trading history and know that my long term edge would play out, and sure enough I had a winning streak of 8-9 trades. But you have to know yourself well enough and be honest enough to understand if you are losing because you are still learning and making mistakes, or if you are a profitable trader and your edge just isn’t playing out at the moment. Bottom line is you need to risk a small enough amount that you can survive a long streak of losses. If you have an edge you shouldn’t ever see more than a string of 10 losses, which means if you keep your risk at around 2% you should be able to survive that.[/QUOTE]
Thanks for that Aaron, I really appreciate it and thats very reassuring to know that loss is quite normal, I am definitely still learning. I should also say that the loss came through a number of trades. I was also guilty of taking my first ever revenge trade the other day which I lost and was completely my fault. I think I just need to gather myself and get back to basics. Perhaps one of my problems is I’m quite tight with the little money I have. For instance, I have no intention of losing the whole of my initial investment, I have always had a level in mind that I would quit if it got down to before I went completely bust. I’m gonna take a bit of time out and clear my head to recoup my loss.
I recently had witness one of my admired trader implement channel targetting into his plan and the result was amazing… he then sent me this youtube video which explains the channel that he used.
It’s in the second half after all the flags/poles stuff. The chart in the video was pretty messy and not so easy to see but the idea was well explained. Check it out of you’re interested.
I’ve studied and did some back/forward test and am going to implement the knowledge into my PA trading starting this Monday, too, at 1/10th my normal lot size. Let’s see how it goes.
I remember losing 30% of my life savings within a week when I first jumped blindly into trading. I then study and demo for 9 months having very nice result. And now I’m back live trading again. Right away I lose another 5% lol…
But I’m getting there I’m starting to see the light at the end of my tunnel. It will be any moment now.
The most important thing you can do is stay positive and not make the loss personal, and I can tell you have already achieved that. For most people it takes months to train themselves to keep their chin up and quit trying to make each individual trade dedicated to making back a months worth of losses. So I would say you have already won the battle, you have the right mindset and are fully ready to tackle the market and get back to making trades when you are comfortable with it.
I always love to investigate new techniques and methods. Some of them do prove to be successful in the long term and can be added to a price action trading method, or in some cases can be traded by themselves as their own stand alone method. Please keep us updated on how your results turn out. I’m fully on board with people displaying their demo myfxbook accounts now that I understand how it works and can see the value in showing the success of a method and being able to go through trade history and see what trades succeeded/failed and verify the validity of the method.
[QUOTE=“Panupat;610483”]I recently had witness one of my admired trader implement channel targetting into his plan and the result was amazing… he then sent me this youtube video which explains the channel that he used.
It’s in the second half after all the flags/poles stuff. The chart in the video was pretty messy and not so easy to see but the idea was well explained. Check it out of you’re interested.
I’ve studied and did some back/forward test and am going to implement the knowledge into my PA trading starting this Monday, too, at 1/10th my normal lot size. Let’s see how it goes.[/QUOTE]
Hey Panupat
Thanks for the video, I will have a watch of this over the weekend to find out more.
The most important thing you can do is stay positive and not make the loss personal, and I can tell you have already achieved that. For most people it takes months to train themselves to keep their chin up and quit trying to make each individual trade dedicated to making back a months worth of losses. So I would say you have already won the battle, you have the right mindset and are fully ready to tackle the market and get back to making trades when you are comfortable with it.[/QUOTE]
Thanks again Aaron
I think the hardest part is staring up that mountain again knowing you’ve got a big climb just to get into profit. I would love to get so far in profit that I could enjoy the view from the top. Maybe one day!
One common theme I noticed with my failed daily TF trades were that most of them if not all formed on a Friday. Perhaps I need to go back to avoiding Friday daily signals.
I missed some pages of this thread (for several reasons I didn’t read all pages… and now I’ve discovered that the true ‘quick nav’ is fixed in post #2 and not in page #2) and I’m sorry if following question was already discussed; in this case, please show me where you took about it.
Well. I need to ask you about how I should evaluate the high volume in relation of a key level.
In the graph attached, you can see EURCAD W1 which has a high volume on last week closure time where the price has tested the 1.53 level without any PA signal.
This is my evaluation: this high volume range (with upward trend) shows that the price could increase in the next future; in other word, more investors have considered that EURCAD will increase its trend, because the price has tested the key level.
Another questions: when shall I consider the volume? Do I have any PA signals to associate the volume range or I can consider the volume with key level alone?
Please, could you tell me your view about ‘volume’?
I risk 0.05 per lot, do you think this is too much? I thought it was reasonable but due to the failure of three daily trades I’m down quite a bit.
I’m starting to see the light at the end of my tunnel. It will be any moment now.
