Keeping Lot Sizes the SameHey Guys!
Do you find your self increasing and decreasing the lot sizes you trade depending on your trade set up? Or perhaps even doubling down after a previous losing trade? I know I use to! For a number of reasons! The most common being "making up for previous losses". Now I don't completely disagree with different position sizes depending on the trade set up. It definitely has its place in higher levels of trading. When as a seasoned trader, the "revenge trade" temptation is mostly gone.
However as a beginner trader, changing position sizes depending on the trade set up is a bad idea for 2 reasons: #1 It will likely destroy your account unnecessarily. By unnecessarily, I mean you don't have to lose money to learn how to trade. Although you may have to endure losses and persist through adversity in trading, the monetary losses can be small. #2 It deters the beginner trader from their primary focus. No, the primary focus is "not" to make money as a beginner trader. That comes later. The primary focus for the beginner trader is to hone and develop their strategy until the strategy becomes efficient enough to at least reach "relative efficiency". This means month over month, your profit and loss results are at break even.
So when your doubling down on a trade, ask yourself, are you doing it to make money? Or are you doing it to develop your strategy? It's highly likely that you're doing it to make money. Again, you're changing positions sizes for the wrong reasons. So if you're a beginner trader, keep the lot sizes of all your trades the same. Focus and persist on honing and developing your strategy. There's a time and place for everything. When it comes to trading, focusing on making money is only relevant to the trader with an established strategy that's proven to consistently make money in the markets.
Hope this helps!
Have a great day!
Ken
Lotsizes
SIZE MATTERS ! ! ! - MONEY/RISK MANAGEMENTThe temptation of bigger lots is something all traders experience in some parts of their journey. Yes the wins can be nice but the losses can be even greater and damaging. The benefits outweigh every time!!!
MOVE BIG RANGE
We cannot emphasize enough the benefits of breaking down lot sizes to micro lots to learn how to move and maneuver the range in a volatile market. Small lots allow you to do this.
MORE FLEXIBILITY
The flexibility to add to positions or get better entries is only possible when account is not exposed. Smaller lots give you the flexibility to chop and change and add to positions. Allowing you to move big ranges and making changes throughout the move.
POWER OVER FEAR
Bigger lots exposes our accounts, which makes decision making very hard due to fear of loss and blown accounts. Small lots allow you to control and manage fear throughout the process.
STRONG PSYCHOLOGY
Having power over your fears is the greatest feeder to a strong psychology for a traders mindset. String psychology allows a trader to build consistent performance and profits.
LIVE TO FIGHT ANOTHER DAY
The ability to get second chances is something everyone can appreciate in life. Smaller lots allow you to make mistakes and try again.
Hope some of our new traders find this information useful. Please do like, comment and follow to support our work. We really appreciate it!
GoldView
HOW TO MANAGE RISK (ESSENTIAL MATERIAL)How do I calculate/manage risk?
Managing your risk is absolutely essential as profitable trader. When you enter a trade there are only five outcomes:
1) Big win;
2) Small win;
3) Break even;
4) Small loss;
5) Big loss.
As long as you can cut off the "BIG LOSS", no matter how bad you trade, its still likely
that you are a profitable trader. Most people's account got blown up because of big losses.
Here is how I do it:
1) Every trade I only invest 2% of my entire capital; eg a $10000USD account the affordable stop loss would be
2% x $10000USD = $200USD.
2) Calculate my stop loss in pipes;
eg 50 pipes ; $200/50= $4 USD per pipe => Lot size =0.4 Standard Lot
eg 10 pipes ; $200/10=$2 USD per pipe => Lot size = 2 Standard Lot
For a $10000USD account if you are to blown up your account based on the above methodology you will need 50 consecutive losses,
which is statistically impossible.
Apart from the above personally I have also set up my ground rule as follow:
if my account is decreased by 5% daily (including floating losses)
I am done trading for the day. This is because you WILL become emotional at this point and will want to win back.
This win back thought will kill your account. Accept the loss and move on next day. Losing is part of trading.
aud/usd falling wedge pattern has occurred from the 1d and lower. Looking to go long since the price bounced off the support line very nicely.
lotsizes and RR's are listed on the analysis as well and pictures of the further analysis on the 15 min chart will be listed as well. Make sure to check that out as well.
trade safely as well guys.
eur/usd support zone.EUR/USD has hit support after failing to move up in price and break trend from previous analysis I made.
But now it seems to go back to support and retrace from that zone so I'm hoping that buyers push the price higher. price in the 1hr timeframe will be shown as well for further analysis.
RR's and lotsizes are listed.
AUD/USD falling wedgesfalling wedge pattern has occurred from the 1d and lower. Looking to go long since the price bounced off the support line very nicely.
lotsizes and RR's are listed on the analysis as well and pictures of the further analysis on the 15 min chart will be listed as well. Make sure to check that out as well.
trade safely as well guys.