parura

You'd be surprised. Better from reading it in a book it is better to test it yourself. I run statistics of all kind to get odds better than 52/48, 46/54 etc. If I find a pattern with 65/35 it happens like 5 times a year. If it gaps up or down there is about 50% probability that it close the gap or not (depends on the market but I think odds would not be much more better). This is why you using MM ratio of 3:1, because odds give you black or white. At the beggining I thought that if market closes higher 3 days in a row there is a much higher probability that it will go down on 4th day. Still about 50/50 (yep). Probability that it will go down on 5th day goes to like 70% but again, it happens 3-5 times a year. One of the trader's EUREKA you need to find out for yourself!

Assume I have mm rules similiar to these below Account: $2000 (I know, small, but for simplification) Max Risk per Trade: 1% (20 pips or $20) Size: 1 mini (so I can't use scaling in or out) Risk/Reward (and here comes 2 scenarios): A) 1:3 (many says - take profit, move on to next trade) B) or 1:minimum 3 meaning trail SL (many says - let your profit rise) So, I was trying to think logically and ask others before (or instead) test it on real data A scenario will miss some big moves and B scenario will result in more losses or at least break evens Looking something like this A: -20, -20, 60, -20, -20, 60, 60 (PL = 100) B: -20, -20, 199, -20, -20, 1, -20 (PL = 100) Which scenario, from your experience, would be more effective? Or maybe I get similiar results as in the example below? Or maybe I get only more work in second scenario? Any thoughts please...

Bringing the matter I was thinking how do you manage your account in terms of "how much of an account do you keep at brokerage account". What I was thinking of is to keep 5% of account size at broker account and 95% at my bank. These could have 2 advantages: 1. You gain interest rate 2. You are disabled to do stupid things like risking more than 5% (at least to the moment you make a transfer but that might be enough to think things over and cool down) Now, is it a good idea or not(why)?

Thanks, the whole site is great :thumbs up:

I was wondering one thing.. 1. Assume I have trading account size $10.000. This is 30% of my savings I have ($30.000). I will risk 2% each trade ($200). My max drawdown is 30%. Once this level is reached I will stop trading. It tells me system or trader need change, right? Once I am confident again I have to re-build my account size (i.e. by saving regular income or adding from savings account). So I lost 30% - $3.000. I am done for some time trading (if ever again) 2. Assume I have $3.000 trading account and $27.000 left on savings account. Same system with $200 risk each trade (this time it would be 6% - very risky). I say my max drawdown this time is 100% (or near)!!! WOW!!!. Assume I lost the account and to trade again I need new $3.000 In both cases I lost the same amount - $3.000. Both cases I lost 10% of my savings. Now....beside psychological aspect (100% vs 30%) is there a difference? PS: I intentionally assumed the same amount of savings because otherwise it would matter how much you lost ($3.000 may be all the savings you had)