Into the castle - page 6
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It's just a theory, in practice it's different...
With a blocked order we can reduce the amount of loss, or even double the profit.
With a stop loss this will never happen, do not get your hopes up, do not tell us that you are happy to have closed a deal with no losses.
Because it's easy to give your money to a broker by a stop loss, well, that's another word for it...
By having a blocked order we can reduce the amount of loss, or even go into double profit.
How do we do that? Please give us an example, with numbers.
How? Please give an example, with numbers.
This is ideally
This is the ideal.
Look, even in your "ideal", all is not smooth on the history, let alone in real time, when you do not know what will happen next.
Once you close the sell, the drawdown will be even larger and it is not certain that the price will not continue to move down. Look at what happened today on the pound pairs....
Ok. Now look again at your picture. Where the red arrow "locked in" should have closed the buy with a minus. That's it, the deposit is no longer in danger. Next, at the place of the red arrow "opened lock" was to open a buy trade and close it at the place of the blue "close buy". Calculate, the financial result will be the same, then draw conclusions...
Here's a look. Here are two examples, equivalent starting situations in the trade of hypothetical Vasya and Petya.
1. Vasya had a 10% drawdown. He closed the order having received -10% of the deposit. To restore the deposit to the value previous to that of the losing trade he needs to make profitable deals of about 11% to the current deposit.
Andrey, why 11%?
If you don't change the working lot, you don't fix the loss. There is a loss, but it is not fixed, floating, so to speak.
As long as the work volume is stable, the profit is the same as the loss.
The problem here is the absolutization of the trading deposit. The trading deposit is just collateral funds to cover margin requirements, not more. How much you put there is your own business. And they are not identical! trading capital.
For example. The trading capital is 10000 USD. The trader has put $1000 on the trading deposit. And let's assume that his deposit has decreased by 10% (by 100 c.u.). It means that his trading capital has decreased only by 1%. So, can this be a reason to decrease the working lot by 10%. Yes, even 1% would be stupid. Or even if the stock decreased by 50% (500 c.u.), there is still 9,500 c.u. left in reserve. (95%). Continue to trade with a steady lot, "and no nails", as they say.
1. Andrew, why 11 percent?
2. If the work volume does not change, the loss is not fixed. If the working lot does not change, then there is no fixation.
1. Because having lost 10% of the deposit and having closed a losing position, you need to add about 11% to restore the deposit level BEFORE the losing trade.
2. The mathematics is an example of how, all other things being equal, the trader is in a less favorable position in case of a lot, because he has to pay swaps. Mathematics is a stubborn thing; it's useless to argue with it.
1. Because having lost 10% of the deposit and having closed a losing position, you need to add about 11% to restore the deposit level BEFORE the losing trade.
2. The mathematics is an example of how, all other things being equal, the trader is in a less favorable position in case of a lot, because he has to pay swaps. Mathematics is a stubborn creature, it is useless to argue with it.
Look, even in your "ideal" story things are not smooth, let alone in real time, when you don't know what will happen next.
Once you close the sell, the drawdown becomes even bigger and it is not certain that the price will not continue to move downwards. Look at what happened today on the pound pairs....
Ok. Now look again at your picture. Where the red arrow "locked in" should have closed the buy with a minus. That's it, the deposit is no longer in danger. Next, at the place of the red arrow "opened lock" was to open a buy trade and close it at the place of the blue "close buy". Calculate, the financial result will be the same, then draw conclusions...
Sorry I got the subject wrong.
There are trading tactics = trader behaviour = conditions for opening and closing trades there are strict rules that you are now making up on the fly. There are rules and if you follow them clearly there will be a plus or zero...
I use a strategy where 70% of trades have risk and 30% have no risk. Every third trade closes on the upside. Forex is highly volatile and price returns often, not using this effect is like being without one hand.
Also, locks, stops, hedges are all tools. If a trader can't trade, doesn't follow the discipline, breaks the rules, starts scalping and trades with 100 bonus rubles, then nothing will help even if you have lots or no lots.
Sorry I got the subject wrong.
There are trading tactics = trader behaviour = conditions for opening and closing trades there are strict rules that you are now making up on the fly. There are rules and if you follow them clearly there will be plus or zero...
I use a strategy where 70% of trades have risk and 30% have no risk. Every third trade closes on the upside. Forex is highly volatile and price returns often, not using this effect is like being without one hand.
Also, locks, stops, hedges are all tools. They don't know how to trade, they don't observe the discipline, they break the rules, they start trading with 100 bonus rubles, so they don't need lots or no lots.
They don't need to take my word for it, just do the maths on the 2nd grade level. After you check it, think again and it turns out that your wonderful system can be even better and safer and without locks.
Just do the math, nothing else is required to understand it.
Don't take my word for it, calculate it yourself, it takes 2nd grade maths to do it. After you have checked it, think again and it will turn out that your wonderful system can be even better and safer without locks.
Just do the math, nothing else is required to understand it.