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Emily291
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If you need a friend . . . get a dog.
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What you're saying is correct in theory, I think, but in practice trying to trade the huge numbers of contracts needed to maintain the same allocation would cause you to move the markets against you. Be careful though . . . A lot of educators seem to use this explanation when you ask them a question like "if the best hedge fund managers in the world only return an average of 30% per year, how come you're claiming to double your account every month?". Although a small retail trader might be able to outperform a hedge fund because they're not dealing with huge amounts of capital, this isn't going to account for a huge difference of thousands of percent per year.
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Advice for Beginners....don't Try to Make Money.
Emily291 replied to TheNegotiator's topic in Beginners Forum
I think maybe some of the investment banks maybe took your advice judging by last week's earnings reports. Some of their desks had only made around 8% before costs. -
HotForex? C'mon guys, it's not really that much of a surprise is it? The clue's in the name. You're wanting to place a significant sum of money with a financial services firm, why on earth would you chose a firm with a name like this? There are loads of them - easy-forex, forex club, forex.com, forex4you, myforex . . . Okay, maybe I made that last one up but you get the point. Would you bank with a firm called HotBankers? Of course not.
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What do you mean by this? All other things being equal, a larger position size means more risk doesn't it? To me it seems that position sizing is how we control risk. Often people seem to confuse stop losses with 'managing risk', but that's nonsense - a trader might not use stop losses at all and yet still control risk.
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Are you sure this is possible with IB? They're a great broker and I've been using them myself, but they seem to be pretty well known for having crappy trading platforms for daytrading etc. Not sure if this is because they're more used to catering for fund managers who get all their data elsewhere and only trade at the end of the day? Maybe just use online chat or send support an email and ask? It's only a bracket order afterall so they ought to be able to do it.
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You can do it with tradestation I think, but it might be complicated. It might be easier to choose a tick chart with a setting that gives bars roughly similar to the timeframe of 15mins or whatever you have in mind, as combining two tick charts is definitely easy.
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I don't trade forex, but I think the same principle applies for all types of brokers: go with one of the big firms. Your biggest risk with a broker isn't them nickel and diming your order flow, charging you a few cents more commission than the other guy, or taking longer to answer the phone when you call support . . . It's whether the broker is financial stable and well regulated as a company. The last time a load of brokers went bust was with the CHF thing earlier this year. Smaller firms got cleaned out overnight. A few of the big firms were caught up in it and lost way more, but it didn't matter to them because they were so well capitalized.
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Whenever I hear one of these tales, I'm generally of the opinion that it doesn't really tell us anything very much at all. On the one hand, if Schwartz had been a quitter then he'd never had continued trading and become successful, so not quitting is the right thing to do, right? But on the other hand there are plenty of traders/gamblers/wannabes in virtually every field who do precisely that and carry on, yet never succeed. I reckon that the value in carrying on, as Schwartz did, only exists if you're able to stop doing whatever you've been doing to lose and assess what you need to do to start winning. Or if you have some reason to be confident that you're going through a short losing streak in what will otherwise be a much longer profitable run.
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If you had a strategy that had tested well and then performed in live trading as predicted by your testing, and it had a maximum historical drawdown of 20% with no leverage, would you leverage it? If so, by how much? Em
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Too Simple to Work? Advice Needed
Emily291 replied to Traveller82's topic in Swing Trading and Position Trading
Your strategy actually looks pretty good. Simple can be good. It will surely have losing periods though. How many markets are you trading it in, as maybe some diversification will help to avoid massive drawdowns? I'm doing something like this myself and use currency ETFs. My account's not big enough to get into trading lots of futures contracts alongside one another and I didn't want to lose the diversification, so I opted for the ETFs (although I'm now looking at some of the e-Micro futures - anyone got any experience with these contracts?). Em -
What Every Trader Must Know About Drawdowns
Emily291 replied to analyst75's topic in Trading Psychology
I have often wondered why drawdowns are measured from one equity peak to another? Sure, the equity curve is technically in drawdown during this period, but that's really just incidental to when trading (or investment in a fund) begins. Change the start date and the advance out of a drawdown becomes a run-up . . . Are there no better ways of measuring drawdown? Em -
Introduce Yourself Here - Don't Be Shy!!
Emily291 replied to trading4life's topic in Beginners Forum
Hello, Thought I'd introduce myself here! Hope to learn a lot from you more experienced traders on here. Em