tech/a
No Ordinary Duck
- Joined
- 14 October 2004
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Re: Trading / Daytrading for a living
Porper.
Some wise words there.
PEOPLE AREN'T TAUGHT HOW TO TRADE WITH LEVERAGE
Two things I would like to offer up.
If people get margin calls particularly regularly then how they trade is clearly not profitable.
I've said many times before that most traders have no idea if their longterm trading methodolgy (Even if its for short term trading ) is profitable.
Without KNOWING this Trading Margin and in particular CFD's is tantimount to driving blind folded.
THIS is HOW it WORKS.
Setting margin in my veiw should be relative to initial drawdown---If you have no idea what that is likely to be and trade margin OR CFD's youve----- just stepped in front of a bus BLINDFOLDED
Lets say your average drawdown is 8% (which my longerterm systems are.)
Leveraged at 10x then you would have 80% of your equity lost is this occured,not only that but youd have only 20% equity to fight your way into profit,something that testing would not have or been able to consider---simply it wouldnt happen and youd face ruin.
Next is maximum string of Losses and risk.
Again mine is 1% risk and 12 the longest string.
Taking CFD's at 10x my risk becomes 10% and 12 straight then Im ruined.
Without this knowledge I could be trading a highly profitable method (Which it is) and going broke!! simply because I am not in the position to manage my business because I dont have CRITICAL INFORMATION.
For me margin is perfct and so could be CFD's at 3x leverage.
3x gives me max 24% on initial drawdown and 36% on maximum consecutive losses.
Ive NEVER been margin called in the 3 methods and the 3.5 yrs Ive traded them on margin.
Lastly once accumulated profits come into play Margin calls become just a figure of speech.
Compounding of profit and accumulated open profit lead rise to compounding opportunities which WHEN USED CORRECTLY turn average traders into
very profitable businessmen!
On margin loans if called no need topanick and sell the House,boat,car,or kids---simply sell some of your holdings to bring the account into line.
IE $5000 of shares.
LEVERAGE---wouldnt trade longterm without it!!
Porper.
Some wise words there.
PEOPLE AREN'T TAUGHT HOW TO TRADE WITH LEVERAGE
Two things I would like to offer up.
If people get margin calls particularly regularly then how they trade is clearly not profitable.
I've said many times before that most traders have no idea if their longterm trading methodolgy (Even if its for short term trading ) is profitable.
Without KNOWING this Trading Margin and in particular CFD's is tantimount to driving blind folded.
THIS is HOW it WORKS.
Setting margin in my veiw should be relative to initial drawdown---If you have no idea what that is likely to be and trade margin OR CFD's youve----- just stepped in front of a bus BLINDFOLDED
Lets say your average drawdown is 8% (which my longerterm systems are.)
Leveraged at 10x then you would have 80% of your equity lost is this occured,not only that but youd have only 20% equity to fight your way into profit,something that testing would not have or been able to consider---simply it wouldnt happen and youd face ruin.
Next is maximum string of Losses and risk.
Again mine is 1% risk and 12 the longest string.
Taking CFD's at 10x my risk becomes 10% and 12 straight then Im ruined.
Without this knowledge I could be trading a highly profitable method (Which it is) and going broke!! simply because I am not in the position to manage my business because I dont have CRITICAL INFORMATION.
For me margin is perfct and so could be CFD's at 3x leverage.
3x gives me max 24% on initial drawdown and 36% on maximum consecutive losses.
Ive NEVER been margin called in the 3 methods and the 3.5 yrs Ive traded them on margin.
Lastly once accumulated profits come into play Margin calls become just a figure of speech.
Compounding of profit and accumulated open profit lead rise to compounding opportunities which WHEN USED CORRECTLY turn average traders into
very profitable businessmen!
On margin loans if called no need topanick and sell the House,boat,car,or kids---simply sell some of your holdings to bring the account into line.
IE $5000 of shares.
LEVERAGE---wouldnt trade longterm without it!!