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Riskmangement

Risk Management Strategies for Conservative& Aggressive Traders📚 #Risk_management Risk management in forex for retail traders is essential, especially considering the use of leverage. Leverage allows traders to control larger positions in the market with a smaller amount of capital. While leverage can amplify profits, it also increases the risk of losses. Here's how risk management and leverage factor into forex trading: -Position Sizing with Leverage: When using leverage, traders need to be cautious about the size of their positions. Higher leverage ratios allow for larger positions, but they also increase the potential for significant losses. Proper position sizing is crucial to ensure that potential losses are within the trader's risk tolerance. -Stop-Loss Orders with Leverage: Leverage magnifies the impact of market movements, which means losses can accumulate quickly. Placing appropriate stop-loss orders becomes even more critical when using leverage. Traders should set stop-loss levels based on their risk tolerance and the volatility of the currency pair being traded. -Risk-Reward Ratio with Leverage: Leverage affects the risk-reward ratio. While leverage can enhance potential profits, it can also amplify losses. Traders should be mindful of maintaining a favorable risk-reward ratio when considering their profit targets and potential losses. -Diversification with Leverage: Diversification is important for risk management, especially when using leverage. By spreading exposure across different currency pairs or trading strategies, traders can minimize the impact of adverse price movements. Diversification helps to mitigate the risk associated with concentrated positions. -Trading Plan and Journal with Leverage: When using leverage, having a well-defined trading plan is crucial. It outlines the risk management rules, including leverage usage, position sizing, and stop-loss levels. Maintaining a trading journal becomes even more important as it helps traders review their leverage usage and analyze the impact on their trading performance. -Emotional Control with Leverage: Leverage can heighten emotional responses in trading. Traders may be tempted to take on excessive risks or panic during periods of losses. Emotional control becomes vital to avoid impulsive decisions driven by fear or greed. Traders should stick to their risk management plan and avoid overleveraging. In summary, risk management in forex trading is even more crucial when leverage is involved. Traders need to carefully consider position sizing, set appropriate stop-loss levels, maintain a favorable risk-reward ratio, diversify their trades, adhere to their trading plan, and exercise emotional control. By incorporating these practices, traders can navigate the risks associated with leverage and protect their trading capital.
TVC:DXYEducation
by Moon_SmartMoney
2
Educational: Relative Drawdown vs. Absolute DrawdownUnderstanding the concepts of relative drawdown and absolute drawdown is crucial for effective risk management and evaluating the performance of trading strategies. In this publication, we will delve into the understanding of both relative drawdown and absolute drawdown. 🔷 Relative Drawdown: (Sometimes referred to as equity drawdown) Relative drawdown is like looking at how much your money went down compared to the highest amount of money you had in your piggy bank before it started going down. Relative drawdown measures the decline in equity relative to the previous peak value, expressed as a percentage. It provides a proportional view of the drawdown in comparison to the highest equity point achieved. Traders often utilize relative drawdown to assess the performance of their trading strategies over time. By calculating the relative drawdown, traders can determine the percentage loss from the peak and evaluate the strategy's ability to recover from losses. For example, if a trading account reaches a peak equity of $10,000 and subsequently experiences a drawdown with a low point of $8,000, the relative drawdown would be 20% ($2,000 decline divided by $10,000 peak). A higher relative drawdown indicates a more significant loss relative to the previous peak, potentially highlighting the need for adjustments in risk management or strategy refinement. 🔸Relative drawdown provides traders with insights into the consistency of their strategies and the extent of losses experienced during adverse market conditions. It helps them compare the drawdowns of different strategies or trading systems using a percentage-based metric, enabling a better understanding of risk exposure and the ability to set realistic expectations. 🔷 Absolute Drawdown: (Sometimes referred to as balance drawdown) In contrast to relative drawdown, absolute drawdown quantifies the actual monetary value of the decline in equity from the initial balance to low . Continuing from the previous example, if the lowest equity point during the drawdown was $8,000, the absolute drawdown would be $2,000. Absolute drawdown focuses on the actual amount of money you lost from the starting point to the lowest point. It helps us understand the total decrease in money without comparing it to any percentages or ratios. 🔸By understanding the absolute drawdown, traders can assess the real monetary value lost during a drawdown period, which helps in making informed decisions regarding position sizing, risk allocation, and overall portfolio management. It also assists in evaluating the effectiveness of risk management strategies in terms of limiting losses during drawdowns. NB: It is worth noting that it is important to clarity when discussing balance base drawdown as the balance base drawdown can be calculated based on the starting balance of each day or trading session which in this case will have a drawdown calculated based on a dynamic balance as oppose to the static initial balance. ----------------- Relative and absolute drawdowns play a vital role in assessing the performance and risk exposure of trading strategies. While relative drawdown provides a percentage-based view of the decline in equity from the peak, absolute drawdown quantifies the monetary value of the loss. Traders should consider both types of drawdowns to effectively manage risk, set realistic expectations, and make informed decisions about their trading strategies. Remember, understanding and managing drawdowns are key elements of long-term success in the trading world. It's important to understand that drawdowns are a natural and inevitable part of trading. No trader, no matter how experienced or skilled, is immune to drawdowns. Here's a simplified explanation of why drawdowns occur and why traders should not be discouraged by them: When you play a game, there are times when you might make a mistake or encounter challenges that cause you to lose points. Similarly, in trading, the market can sometimes move in a way that goes against your expectations or trading strategy, causing temporary losses in your trading account. This decline in the value of your account is known as a drawdown. Drawdowns occur due to various factors, such as changes in market conditions, unexpected news events, or even errors in decision-making. Markets are influenced by many participants, and their behavior can be unpredictable at times. Therefore, it's natural to experience periods of drawdown. Traders should not be discouraged by drawdowns for a few important reasons: 🔸Learning Opportunity: Drawdowns provide valuable lessons for traders. They offer insights into potential weaknesses in their trading strategies or areas where they can improve their risk management. By analyzing drawdowns, traders can refine their approach and enhance their trading skills. 🔸Long-Term Perspective: Successful traders understand that trading is a long-term game. Drawdowns are often temporary and can be followed by periods of profitability. By maintaining a long-term perspective, traders can ride out drawdowns, knowing that their overall success is determined by their ability to stay focused, adapt, and stick to their trading plans. 🔸Risk Management: Drawdowns highlight the importance of proper risk management. Traders who implement effective risk management techniques, such as setting stop-loss orders, diversifying their portfolios, and managing position sizes, can limit the impact of drawdowns on their overall trading performance. 🔸Psychological Resilience: Drawdowns test a trader's emotional resilience. Successful traders understand that emotions like fear or frustration can cloud judgment and lead to impulsive decisions. By developing emotional resilience and maintaining a disciplined mindset, traders can navigate drawdowns more effectively and make rational decisions based on their trading plans. 🔸Consistency is Key: Consistency in trading is crucial. Drawdowns are part of the journey to profitability. Traders who remain committed to their strategies, continue learning, and adapt as needed have a higher likelihood of success over the long run.
PEPPERSTONE:ETHUSDEducation
by ChristopherDownie
2
RISK MANAGEMENT: A CASE FOR THE HIGHER TIMEFRAME Abstract: This publication explores the differences between higher timeframes and lower timeframes in trading and delves into how various factors, such as spread, commissions, and news releases, affect these timeframes. Additionally, the concept of price fractality is discussed, highlighting how both higher and lower timeframes exhibit similar patterns despite their apparent distinctions. It is argued that higher timeframes offer certain advantages by mitigating the challenges faced on lower timeframes. Introduction: Trading involves analyzing and interpreting price movements to make informed decisions. Traders often utilize different timeframes, each offering unique perspectives on market behavior. This publication aims to examine the distinctions between higher timeframes and lower timeframes, focusing on the impact of spread, commissions, and news releases, while considering the fractal nature of price. Higher Timeframes: Higher timeframes, such as daily, weekly, or monthly charts, encompass longer periods and provide a broader view of price movements. These timeframes tend to smooth out market noise and offer a more comprehensive understanding of overall market trends and patterns. Key differences and advantages include: 🔹Reduced impact of spread: Higher timeframes generally exhibit wider price ranges, making the spread a relatively smaller percentage of the overall movement. This can minimize the impact of spreads on trading outcomes. 🔹Lower impact of commissions: Longer timeframes typically result in fewer trades, reducing the frequency of commission charges and their impact on profitability. 🔹Less sensitivity to news releases: Higher timeframes are less susceptible to sudden price fluctuations caused by news releases or economic events. Traders can avoid getting caught in high volatility and erratic price movements. Lower Timeframes: Lower timeframes, such as hourly, 15-minute, or 5-minute charts, focus on shorter periods and provide more granular insights into price movements. These timeframes are characterized by faster-paced trading and require different considerations. Key differences and challenges include: 🔹Spread impact: Lower timeframes tend to have smaller price ranges, making the spread a larger percentage of the movement. This can impact profitability, as traders need to overcome the spread before a trade becomes profitable. 🔹Commission sensitivity: Frequent trading on lower timeframes can lead to more commission charges, affecting overall profitability. Traders should consider the impact of commissions on their strategies. 🔹Increased vulnerability to news releases: Lower timeframes are more prone to sudden price movements triggered by news releases. Traders need to be vigilant and manage risks associated with unexpected volatility. Price Fractality: Price movements can be argued to be fractal in nature, exhibiting similar patterns at different timeframes. Fractals are self-repeating patterns that emerge at various scales. In trading, this means that the price behavior observed on a higher timeframe can also be found within the price movements on lower timeframes. This suggests that the market's dynamics are consistent across different timeframes. Despite the similarities in price fractality, higher timeframes offer advantages due to their reduced exposure to certain challenges: Conclusion: In conclusion, understanding the differences between higher timeframes and lower timeframes is crucial for traders. While both timeframes exhibit fractal patterns, higher timeframes offer advantages by minimizing the impact of spread, commissions, and news releases. 🔹Smoother trends: Higher timeframes help identify more significant and reliable trends, reducing the impact of noise and false signals prevalent on lower timeframes. 🔹Enhanced risk management: Longer timeframes provide clearer support and resistance levels, enabling better risk assessment and position sizing. 🔹Reduced emotional stress: The slower pace of higher timeframes can help traders avoid impulsive decisions caused by the rapid price movements often seen on lower timeframes. Conclusion: In conclusion, understanding the differences between higher timeframes and lower timeframes is crucial for traders. While both timeframes exhibit fractal patterns, higher timeframes offer advantages by minimizing the impact of spread, commissions, and news releases. By adopting a strategic approach that aligns with their trading goals and risk tolerance, traders can harness the benefits of different timeframes and enhance their trading performance.
PEPPERSTONE:BTCUSDEducation
by ChristopherDownie
3
Predicting the bottom of AvalancheAVAX/USDT.P on BYBIT Looks like the W-X-Y pattern is coming to an end and we will try to predict the bottom as best we can to catch a swing trade of wave C or even a 3 and a new rally. If the count is right and the weekly support level at 13.910 does not hold, a one to one (of the W-X-Y) price target will be next. We could speculate the weekly level then will serve as a SR flip to confirm the start of the last wave 5. Watch out for the weekly bar ending as a spinning top or doji for a bullish reversal up to wave 4 of 3 of C of Y in the last zig zag. Risk For me the stop level would be either right under weekly level at 12.180 or at the low of 10.535 also giving a double bottom setup. If we se it go all the wave to the high of wave A we could se a Risk/Reward ratio at a proximally 6. Targets First target for locking in profit would be the weekly level at 13.910 then we have the point of control for the whole correction at 17.285 and the high of A or 1 at 22.795. Avalanche Market Cap Avalanche market cap is now ricing to $4,741,712,576 and as of writing the trading volume (24h) is $132,773,075. Conclusion I will continue watching the price action on Avalanche and if it will continue to decline and unfold in way similar to the predicted pattern. It could be an interesting swing trade to the upside for a low risk.
Long
by Ingvar77
ACB Aurora Cannabis Long SetupOn the 4H chart ACB has dropped out of a head and shoulders pattern list winter with high volume into a downtrend with lower volume now into support / demand as shown by the Luxalgo indicator. The anchored VWAP is also trending downward with support at the minus 1 and minus 2 standard deviations. The volume profile shows the majority of the recent share exchanges have been at the $0.65 per share area. If price rises above that POC line of the profile, ACB will get the attention of new buyers while short sellers will begin to cover thus causing buying pressure and momentum. I will buy a sizeable quantity for perhaps $1-2K shares once price gets over that POC line. Prospective buyers will consider this to be a reversal confirmation. I will be one of them. The first target is the volume void at $0.79 or about 25% with the other target being one standard deviation above VWAP at about $.90. Stop loss will be set at $0.05 below the entry. For profit insurance I will hedge with a single put option contract at a strike of $0.70 with a 90-120 DTE to diminish risk at a minimal cost.
NASDAQ:ACBLong
by AwesomeAvani
Practical Insights into the Risk ManagementHey there, amazing @TradingView community! It's @Vestinda, and we're on a mission to deliver content that truly makes a difference. 👉 To become a successful crypto trader, it's essential to have a solid understanding of trade and risk management concepts, such as stop losses, position sizing, and scaling. In this article, we'll explore these key concepts in-depth to help you minimize your risks and maximize your gains in the cryptocurrency market. Four Risk Management Concepts Every Crypto Trader Should Understand To effectively manage the risk associated with trading, it is essential to first develop a comprehensive trade management and risk management strategy. Before committing your capital to any position, it's critical to have a clear plan in place to minimize potential losses and optimize your overall trading performance. Successful market speculation requires effective risk management to preserve capital, which is the primary objective. By minimizing losses and maximizing gains through a comprehensive trade and risk management strategy, traders can achieve long-term success in the market. One of the key strategies employed by the most successful traders is to minimize their losses while allowing their profitable trades to run. This approach is essential for avoiding disastrous scenarios, such as allowing profitable trades to turn into losers or allowing a single bad trade to wipe out an entire account. By focusing on risk management and trade management, traders can increase their chances of success and protect their capital over the long term. It's true that implementing the "cut losses quickly and let profitable trades ride" strategy can be challenging, especially for discretionary traders who need to constantly evaluate changes in fundamentals and market sentiment against price movements. However, there are trade and risk management ("TRM") tools and methods available that can help simplify this process. While these tools and methods may seem complex at first, they are quite accessible and easy to learn. With the right TRM strategies in place, traders can effectively manage risk and optimize their performance in any market condition. Before diving into trading, it's crucial to understand four key concepts in trade and risk management: Stop losses: Stop losses are predetermined exit points designed to limit potential losses on a trade. By setting a stop loss, traders can automatically close a position if the market moves against them beyond a certain point, minimizing their losses. Traders may use price action signals, technical indicator signals, fundamental analysis, or a combination of all three to determine the appropriate level for a stop-loss order. This helps to limit potential losses on trade and is a crucial component of effective risk management. Position sizing: Position sizing refers to the amount of capital allocated to a specific trade. By properly sizing positions based on risk tolerance and market conditions, traders can optimize their overall risk management strategy and minimize the impact of potential losses. Position sizing refers to the process of determining the quantity of cryptocurrency to long or short based on the maximum amount of value a trader is willing to lose if the trade fails, also known as "max risk." For novice traders, it is recommended that the maximum risk should not exceed 1-2% of their portfolio for short-term transactions and 5% for longer-term positions. For example, if a trader has a cryptocurrency account with $ 1,000 and wishes to purchase a token with a market price of $ 10.0 per token, they would need to determine the appropriate position size to maintain their desired level of risk. If their analysis indicates that they should place a stop loss at $ 5.0 per token to limit their maximum risk to 2% of their account, or $ 20.0, then the appropriate position size would be 4 units (40$ position size). This way, if the token's value drops by $ 5.0, the resulting loss of $ 20.0 would equal 2% of the trader's account. Scaling: Scaling involves adjusting position sizes based on the performance of a trade or the overall market conditions. By scaling into or out of positions based on market conditions, traders can adjust their risk exposure and optimize their potential for gains while minimizing potential losses. Scaling refers to the practice of dividing entries and exits into two or more orders around a trader's intended entry/exit area to reduce the likelihood of setting an entry too low or too high. This is particularly important because it is nearly impossible to predict the exact price or time at which the market's direction or volatility levels will change. For example, if a trader intends to buy a token for $ 10.0 but their analysis indicates that it may drop as low as $ 8.0 before sentiment entirely flips bullish, they should consider dividing their entry/exit orders into multiple price levels. This way, they can enter the trade with a partial position if the token's price does not drop below $10.0, but if it drops to $ 8.0, they can scale into a lower average price of $ 8.75. By using scaling and position sizing in conjunction with a maximum stop loss level, traders can effectively manage their risk and reduce the likelihood of incurring significant losses. While these concepts are relatively simple, understanding and applying them correctly can help traders avoid significant risks in the cryptocurrency market. Leverage: Trading with leverage involves taking positions that exceed the account's total capital, which can be done through crypto exchanges (CEXs) offering margin trading or some DeFi protocols providing advanced borrowing mechanisms. For instance, assume you have $ 100 in your account, and you want to purchase 1 unit of XYZ token worth $ 100, creating an open position valued at $ 100. Margin trading offered by a CEX may only require a 10% margin, meaning you only need to invest $ 10 instead of the entire $ 100. You can then utilize the remaining $ 90 to open additional positions, which can be tempting for many traders. With a 10% margin requirement and a $ 100 account, you can open a position size of 10 XYZ tokens, having a notional value of $ 1000 ($ 100 x 10 units), with the CEX holding the $ 100 in your account as a margin for the trades. This would make you leveraged 10x, which is considered an extremely high amount of leverage. If the token increases in value by 10% in a short period, the position value would grow from $ 1000 to $ 1100, which means you could double your account value from $ 100 to $ 200 (i.e., $ 100 profit + $ 100 margin). Alternatively, if the token rises by 20% to $ 1200, you would triple your account to $ 300 in value. Although the potential for high profits may sound exciting, it is crucial to remember the risks associated with trading with leverage, and it is advisable to exercise caution and not get carried away by the prospect of quick and easy gains. Many traders are lured by the potential profits of leveraged trading, but it's important to remember that leverage can be just as dangerous as it is rewarding. If a trader opens a position with 10x leverage and the position loses just 5%, that would be a loss of $ 50, which is 50% of their $ 100 account. Additionally, if the position were to lose 10%, resulting in a $ 100 loss, the trader would receive a margin call and would need to deposit more money to keep their trades open. If they are unable to do so, the CEX will close all positions, also known as being "liquidated". The CEX will use the margin that the trader had provided to cover the $ 100 loss, which means that the trader's account balance would be reduced to $ 0. It's essential to be aware of the risks of leveraged trading, as you could potentially lose everything you've invested. It's important to remember that leverage in crypto trading is a double-edged sword that can either grow your account or quickly deplete it. While it's possible to make significant profits with leverage, it's equally possible to suffer substantial losses. As a new trader, it's important to acknowledge that trading with leverage requires expertise and a sound risk management strategy, which can be challenging to implement successfully. Therefore, it's wise to approach leverage with caution and focus on developing your skills and knowledge before considering this tool. Here are some recommendations that can help you navigate the exciting but risky world of crypto trading: First, it's important to be conservative with your risk-taking and to only invest in your very best trade ideas. Limiting your total exposure to the crypto sector to a small percentage of your total liquid capital, starting at 1%, is a good way to minimize your risk. You should also limit your exposure to a specific crypto asset to a small percentage of your total crypto portfolio, with a 1% to 2% max risk on short-term trades and a max of 5% risk on longer-term positions. Using a stop loss with every position is also crucial to limit potential losses. Remember, perfect timing is near impossible, so consider scaling into trading positions or "dollar cost averaging" into longer-term investments. Take profits along the way if a trade goes your way. And most importantly, avoid using leverage, which can be a double-edged sword and lead to substantial losses. Lastly, only invest your capital in your very best ideas, which should be low-risk/high-reward setups on high-probability ideas. Don't force trades when there are no compelling opportunities, and remember that "no position" is a perfectly fine position when you don't see any good opportunities. Calling all traders! Are you ready to take your skills to the next level? Join our community of like-minded traders and stay up to date with the latest market trends and insights. Hit that follow button and show your support by giving this article a big thumbs up. Together, we'll navigate the markets with ease and achieve financial success. Don't miss out on this opportunity to grow and learn with us. Let's do this!
INDEX:BTCUSDEducation
by Vestinda
1
The Story of a Failed Trader | OKXIDEASOnce upon a time there was a man who was a very poor and he belong to a middle class family but he had the ability to dream it. He was 20 years old and he also think that he spend all of had 20 years doing nothing, he was a dreamer. He wanted to become a rich man, he finding ways to become a rich man, he tried almost every thing but failed. One day he watched a video about trading on YouTube and he decided to become a trader, become a rich with trading and fulfill all of had dreams. He started to learn trading, he watched all of educational videos about trading on YouTube and spend had 15 hours every day just watching videos, now he knows about the basic trading he shifted to the analysis part of trading, he started to practice and learn the technical analysis. He find the method that he can trade with, he combined some technical indicator signals and created strategy for himself. Now he had very passionate about trading, wanted to open a real account and start trading with real account. He had some saving money around 500 dollar he deposited that money in the real account and start trading with that money. He started dreaming from the first day of trading and created some trading rules for himself like he had to take 10% risk per trade and don't take that trade which is below 1/1 risk to reward ratio. On the first day he had taken almost 3 trades and win all of them, now he was more excited for trading he had made $192 profit means something around 38% profit on 500 dollar account. He wanted to trade more but he was a little bit smarter one, he think that i am in profit and my wining ratio is 100% so why i just damage my wining ratio and why i just risk my today profit so he had decided to come back tomorrow. On the second day he had $692 total balance in the account, he had to play a little bit more smarter than a previous day and he decided to take 10% risk per trade of the current total balance $692 in the account rather than the starting balance which is $500. On the second day he take almost 4 trades and he won 2 trades out of 4 trades, now the account condition had almost break-even no loss & no profit, he decided to try again and trade more, he finding the reason to trade more and then he calculate today and yesterday total taken trades which is 7 trades, he think that i won 5 trades out of 7 trades so my wining ratio is almost around 70% which is good and i can trade more because my wining ratio is still above 50% so i am still in positive side. He trade almost 3 trades again and he lose all of them, now he had very sad and almost broken, he decided to step back and come back later. He sturdy himself and come back on the third day, now he had facing a little bit draw-down on the third day the total account balance is around 484 dollar, he started looking for the trades opportunity and at the end of the day he took almost 5 trades with the 10% risk per trade but the third day results had also again bad and he lose 4 trades out of 5 and just win 1 trade, he had very shameful from himself, he closed the laptop goes to outdoor and talk to himself. He analysis the current situation of the account, it that point the total account balance is around 276 dollar he almost around 45% in draw-down and the wining ratio had below 50% so now he entered to the negative side. On the fourth day morning he traded 2 trades and he lose both of them now he almost lose the hope and the account condition had around 72% in draw-down and he left only 138 dollar in the account. At the time he give up and he just decided to depend on just one trade, he just waiting for the best opportunity of the day and finally he got the trade but at the end he lose that trade again and he almost blow out had account. After that all he had stressful and sad from almost one week, he decided to leave the trading and move on to the next thing and he looking to find other things that suitable for him because he think that trading is not suitable for him. One month later he just scrolling on the internet and he see the FAQ that 90% of traders lose and only 10% had succeed, now he had a little bit shock and he think that its pretty normal every trader in the 90% had facing that stage which stage that i faced. He decided to come back to trading and start from the zero, he started to modify had strategy and created new rules for had strategy like he set this time risk to reward ratio for had trades is minimum 1/2 and he decided to risk only 2% of the total account also he decided to take only 2 trades per day, this time he opened the demo account rather than the real account and start trading with demo account, he decided to journal had journey and after one month of consistency he hadn't break any rules and when he see the results after month he had profitable, now he feel like stronger and he continue the journey with that same demo account after three months he had similar results and still profitable. In that time he think that i don't have much money and in trading it's required a lot of money to earn a lot of profits, he started to search for that how he had to prove himself to big investors and raise money for himself to trade. One day he searching and he knows about prop firms trading now he had interested in that and wanted to know more about prop firms, he think that this is the big opportunity for himself to become succeed quickly, now he decided to trade with prop firms and buy the challenge from the prop firms, he adjusted had strategy rules and trading plan according to the prop firms requirement, now but the only problem is that he don't have money to actually buy the prop firms challenge. By the way he was dropout from the school after completing had secondary education and so he just setting at the home, he don't have much money to buy the challenge, the pocket money of him had just depend on him father and he hadn't want to say to father to give me extra money because of him father was very poor and he work as a taxi driver, so then he had decided to get the any kind of job for himself and try to earn some money in the form of salary and buy the challenge with that money, he worked hard and after one month he got the salary and then he just swift to the prop firm website and buy the $50000 account challenge for himself, now he started trading with challenge account phase one, on the phase one he decided to risk only 1% per trade, take only 2 trades a day and the every trade risk to reward ratio had to minimum 1/2 after one month of consistency he gained +8% profit, he was in profit but he hadn't achieved the prop firm required profit target which is +10% in that case prop firm gives traders free retake so then he take the challenge again with the new account and new month from zero and he think that my wining ratio for the previous month is almost around 40% with minimum 1/2 risk to reward ratio and my daily limit is 2 trades so i need to increase my daily limit from 2 to 3 because if i traded with the same rule 2 trades a day then i hadn't pass with 40% wining ratio. He calculate some numbers like he think, if i take 3 trades per day so then at the end of the month my all trades had to be 60 trades per month and if i maintain my 40% wining ratio then i can easily pass the challenge with that mindset he started the challenge and strictly follow the rules after month he hadn't maintain the 40% wining ratio and he end up with some loss and failed the challenge, this time he almost faced big depression after some days left he realized had mistake and he think i made mistake that i increase my daily trades limit because of this my wining accuracy goes down, i just forced myself to take 3 trades per day and get trapped into the normal trades. At that time he hadn't left any pathway he almost try everything but at the end he faced failure, him father had now getting older and he decided to step back again he start going to the normal job and start saving 30% of had salary, he do that job for almost one year and after one year later he had some saved money in the bank account to buy multiple 10x challenges, he come back to the trading but this time he hadn't leave the job and he do trading like part time thing. He started had journey again he decided to hadn't give up and repeat the process so then he started buying challenges after one by one in some challenges he failed in phase one in some he failed in phase two in some he almost pass the challenge and got the live funded account but hadn't get payout and lose the account in the first month. The journey had started goes on and he just repeating the process and doing try again and again. Will be continued..... Some lessons from the story > Never open real account in the start, try to learn first on demo account. > Don't try to be smart in the front of the market. > Don't lose hope in draw-downs just repeat the process of your trading plan. > Take every trade with the hope of wining. > Never depend on a single trade. > Don't leave too fast stay in the market. > Give yourself enough time to create the solid proven strategy that works at least for you. > Respect your trading limits. > Don't depend on just trading and never leave your job, consider trading like part-time thing in the starting. > Learn from your mistakes and improve your performance. > Make mistakes but don't repeat that mistakes again. > Never depend on small capital always look for an opportunity. > Journal your journey, record your trading performance and improve next time. > Don't fear from failure. > Be patient, market is here not going anywhere. > Don't force yourself to take normal trades wait for good opportunity always. > Don't count the numbers, you need to count the percentage. > Don't try to be rich quickly. > Step back, if you damaged from market then simply step back and come back stronger don't try to fight. If you learned any other lessons from the story, let me know in the comments. What you feel about one day he will be succeed or just the failure always, also let me know in the comments. I hope you enjoyed the story, appreciate my work with like comments and share. I wish you good luck in trading.
Education
by TheLoserMan
1
Turtle Power: Experiment Turns Novices into MillionairesHi and welcome back! As a trader, you have probably at one time heard about the Turtle Traders, right? But what was it, and what can we learn from it? Let me take you on a journey into the fascinating world of the Turtle trading strategy! 🐢💰 This legendary trading experiment, conceived by two master traders, Richard Dennis and William Eckhardt, in the 1980s, showcases the power of a well-designed system and the right mindset. Dennis believed anyone could be trained to trade successfully, while Eckhardt argued that trading skills were innate. To settle the debate, they devised the Turtle trading experiment. They selected a diverse group of 23 individuals, known as the "Turtles," and taught them a trend-following trading system focused on trading commodities and currencies. The core principles of this system were: Follow the trend : The Turtles used Donchian Channels, tracking 20-day and 55-day price channels, to identify breakouts and breakdowns. When the market price broke above the 20-day high, it was a buy signal. When it broke below the 20-day low, it was a sell signal. Cut losses short : The Turtles followed a 2% rule, never risking more than 2% of their account on any single trade. They calculated position sizes using the N value, the 20-day average true range (ATR), dividing the 2% risk amount by the N value. Position sizing and pyramiding : The Turtles adjusted their position sizes based on market volatility and employed pyramiding, adding more contracts at specific increments up to a maximum limit as the market trended in their favor. Stop Losses : They used a stop-loss order equal to 2N for every trade, exiting the trade to minimize losses if the market moved against their position by twice the N value. Diversification : The Turtles traded a diversified portfolio of markets, spreading risk and enhancing returns. Scaling Out : They used a two-tiered exit strategy, exiting a portion of their position when the market retraced by 10-day low/high and the remaining position when the market retraced by 20-day low/high. With these principles, the Turtles were handed real money to trade. Over the next four years, they collectively made more than $100 million , proving that trading success could be taught. The Turtle trading experiment demonstrated the power of a disciplined, trend-following system combined with the right mindset. In conclusion, the Turtle trading strategy is an extraordinary tale of how a simple, yet effective, trading system can lead to remarkable results when executed with discipline and consistency . As you venture into the world of trading, remember that the strategy in itself is not as important as the lessons of the Turtles: stay disciplined, follow the trend, and manage your risk . You might just be the next trading success story! 🌊📈 Want to become a Turtle? 💡 Curious about the Turtle trading strategy? Dive into TradingView's Public Indicator library, where you'll find a collection of Turtle-related scripts crafted by the Pine Script™ community. Just open a chart, click "Indicators," and search "Turtle" to access a variety of indicators that'll give you a feel for this legendary system. Happy exploring! 💡 The Original Turtle Rules (PDF): This free eBook, written by Curtis M. Faith, one of the original Turtles, contains the original Turtle trading rules and guidelines. Link: www.trendfollowing.com 🚀 Like and follow if you appreciated this article. 📖 More useful publications can be found under "Related Ideas" below ⬇️⬇️⬇️
BITSTAMP:BTCUSDEducation
by Nico.Muselle
87
Top Mistakes to Avoid After a Losing TradeI hope you already know that losing trades are inevitable in trading. No matter how professional a trader is, mistakes are made. It's part of the game, and the possibility of making mistakes should simply be factored into your trading strategy. But what really matters for success in the market is how you handle the fact of incurring losses. Today, I've compiled a list of actions you should avoid after a loss: Avoid immediately trying to recoup lost money. "Revenge trading" is a common mistake where a trader, after a loss, wants to take revenge on the market and quickly recover losses. This is purely a psychological and emotional problem. After a loss, it's better to take a break and objectively evaluate the situation before making a decision to enter into a new trade. Don't look for someone to blame for your losses. It's very easy to find a reason for your loss: market conditions, manipulators, other traders, or Telegram channels where you seek signals. Ultimately, you must take responsibility for your own decisions and actions. Look for the real cause! Don't rush to change your trading strategy after a losing trade. Radical changes in strategy after a loss can lead to new losses. Instead, re-evaluate the strategy and identify areas that need improvement, study the reason for the loss. A loss does not necessarily mean that the strategy is ineffective. Don't ignore risk management. Until you deal with risk management, you will suffer losses in the market again and again. A trader must have a risk management plan to protect themselves from a series of losses. Don't jump into hot trades on the spot and don't blindly follow the crowd. Take a break, conduct thorough analysis, and make a well-reasoned decision to enter into a trade. If you rush again or jump in with the crowd, it usually leads to even greater losses.
Education
by theanabioz
6 month hold on $GTN with tight risk 80% upsideGTN has amazing fundamentals in Broadcasting sub industry compared to its peers, technically at the bottom of an expanding long term wedge, and we're going into political ad season and its market is in many swing states that will see high political ad spending; this has a tight risk stop loss at 18% and easy upside of 80%; I will take a measured long position in this soon at 2%-4% of portfolio and hold for 6=12 months. I do not have a position in this currently but will likely go long this week
NYSE:GTN
by dilille010
2
Simple Math Defies Logic"The ones who make the most money lose the least when they are wrong" Let's use a scalping trading style for example Say you have a set risk reward ratio of -10 pips for being wrong +30 pips for being right Start trading Loss Loss Loss Win Loss Loss Loss Loss Loss Win Loss Loss Loss Win Win Loss Loss Win Loss Loss Wow, a lot of losses, but hold on.... You have the same amount of money you started with, minus maybe a small bit on commission. How does that happen? Let's put the running total (pips) next to each trade Loss -10 Loss -20 Loss -30 Win 0 Loss -10 Loss -20 Loss -30 Loss -40 Loss -50 Win -20 Loss -30 Loss -40 Loss -50 Win -20 Win +10 Loss 0 Loss -10 Win +20 Loss +10 Loss 0 Final for the day = 0 ( -1.5 - 2.5 pips for commissions) Accuracy rate: 30% So in simple terms, by just using a simple risk management set up that allows you to win more than 1x the risk, you do not have to have a very high accuracy rate in order to make even a small profit. It is very difficult to keep your mind in check about this simple math, because we look at each trade on it's own, instead of looking at a series of trades (for a day/week/month) to judge performance. Keeping the overall picture in mind, and just making sure you do not allow more risk on a position than you planned, and most cases you will begin to see an improvement on trading. By not using stops, losses can quickly mount up, because losing streaks happen. Stick to the plan, and let your mind just sit in the corner mad about the stop rules (Ignore the feeling, like a 2 year old that didn't get ice cream, or because they weren't right, & just remember the math). *If you move your stop, one of two things apply: You are either finding more support for the idea, just a bad entry. Move the stop to what you would risk as an additional position had you taken the trade from the spot you decide to move the stop from, and count it as two trades. If you had a small stop, but not the maximum risk you allow on the idea, then move it no further than you planned to risk as a maximum for a single trade. Moving a stop because you have a reason is OK, just COUNT IT, and MAKE SURE you have a REASON to do so. DO NOT just move it because you don't want to lose, or you will take out your own account very quickly.
BITSTAMP:BTCUSDEducation
by ForexStoryteller
AUDCAD, LongPrice action is shifting from a bearish market to a potential bullish one. Price is currently moving within a decending channel which is at a level that has had a strong reaction too previously indicating that we could see the next bullish phase begin. To add confluence to this set up, we could see a H&S pattern which the Right shoulder could be in the beginning with a swing target of 0.93350 range. Look at the LTF for an entry that meets your trading plan. Thanks Trade safe ** If you felt this was helpful in any way, hit the LIKE button and FOLLOW me for more educational ideas and analysis ** Share your opinion on this pair by leaving a comment
Long
by ktlfx
1