Are you ready to meet the black swan? - page 15
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I love black swans, but only when roasted).
It's an expensive treat - royal food.) Especially now they're red-listed.
How can it be 100%? Even if you are in the black, the probability that after a black swan your broker will not be able not only to give out the winnings, but even just to return the deposit, is very far from zero.
After every black swan many honest brokers go bankrupt.
There are some guarantees nonetheless:
A guarantee fund
As an individual, you receive protection from the Guarantee Fund up to a maximum of EUR 100,000 on the cash deposits that you hold with our bank. Cash deposits are calculated as net unrestricted deposits minus any debts owed to the bank.
I say, only the funds allocated to the maximum risk will lose (for example, I have 20-30% of all funds)-and the rest will remain in your pocket). We trade on the shoulders - why do I need all money to trade - that I can not trade an amount of 10 000 USD with 3 lots and a maximum risk of 30% - after which I stop the trade and optimize. Why do I have to deposit all my funds--can't I deposit 3 000 and use them to trade 3 lots? Yes, I can. That's the advantage of leverage. But for myself and for those who understand it - 100% guarantee that in case of force majeure only losses will be predetermined by myself.
I saw this clarification of yours after I replied.
Yes, I agree. This is probably the only way that can really protect you from big unexpected losses.
For example, using this algorithm:
Suppose you have $100,000 and you have a working strategy that doubles your open positions with 70% probability.
Then it is wise to work at high risk, with increasing lots in geometric progression, with an intermediate partial withdrawal (say at each tripling remove a third), but only with the amount of the deposit, for example, equal to 1% of the total amount ($ 1000), while the remaining 99% ($ 99000) keep in a glass jar underground. As soon as we drain 1% (a kind of SL), we deposit the next 1%.
So even with the onset of the black swan your maximum risk is 1%.
Simple mathematical calculations will show that such a high-risk strategy will be less risky and more profitable than a conservative strategy, but using all means.
The paradox.
But only such a strategy is very unprofitable for brokers.
That's exactly what I meant here.
I saw your clarification after you answered.
Yes, I agree. This is probably the only way that can really protect you from big unexpected losses.
For example, using this algorithm:
Suppose you have $100,000 and you have a working strategy that doubles your open positions with 70% probability.
Then it is wise to work at high risk, with increasing lots in geometric progression, with an intermediate partial withdrawal (say at each tripling remove a third), but only with the amount of the deposit, for example, equal to 1% of the total amount ($ 1000), while the remaining 99% ($ 99000) keep in a glass jar underground. As soon as we drain 1% (a kind of SL), we deposit the next 1%.
So even with the onset of the black swan your maximum risk is 1%.
A simple mathematical calculation will show that such a high-risk strategy will be less risky and more profitable than a conservative strategy but using all funds.
The paradox.
But only such a strategy is very unprofitable for brokers.
Yes, brokers benefit from it all at once))
Yes, brokers benefit from it all at once))
I saw it after I answered.
Yes, I agree. This is probably the only way that can really protect you from big unexpected losses.
For example with this algorithm:
Suppose you have $100,000 and you have a working strategy that doubles the size of your open positions with 70% probability.
Then it is wise to work at high risk, with increasing lots in geometric progression, with an intermediate partial withdrawal (say at each tripling remove a third), but only with the amount of the deposit, for example, equal to 1% of the total amount ($ 1000), while the remaining 99% ($ 99000) keep in a glass jar underground. As soon as we withdraw 1% (a kind of SL), we deposit the next 1%.
So even with a black swan, your maximum risk is 1%.
Simple mathematical calculations will show that such a high-risk strategy will be less risky and more profitable than a conservative strategy, but using all funds.
The paradox.
But only such a strategy is very unprofitable for brokers.
That's exactly what I mean here.
Yes a good algorithm - I wish I had such sums at my disposal. Of course--the bigger the deposit--the more space and less money one has to use--reduce risks.
There is another way to protect your deposit from any swan and even if your broker goes bankrupt. While staying in the market all the time. But this is a long topic and will probably be controversial for many. It will also work if your trading strategy is very successful: with a doubling probability of -60-70%.
I get it - I just read it now.
Aliaksandr Maksimau:
Yes, it's a good algorithm - too bad I don't have that much money yet. I have noidea what to do with it, but I do not know how to do it.
Who cares. You can do the same on a cent account with 100 real quid.
If they are the latter, it would be better to put 1 dollar on the cent account and work up a hand and bumps on 1 quid. The same adrenaline will be there.
The main thing is discipline (no wagering and intermediate withdrawals). Not to make these interim withdrawals - a common mistake, leading to bankruptcy, even if you have excellent statistics.
What difference does it make? We may do the same on cent account with 100 real dollars.
If they are the latter, it would be better to put 1 dollar on the cent account and gain hands and bumps on 1 dollar. The same adrenaline will be there.
The main thing is discipline (no wagering and making sure to make intermediate withdrawals). Not making these interim withdrawals is a common mistake that leads to bankruptcy, even if you have excellent stats.
Profits have to be withdrawn. I agree. That 1% option isn't bad either. Even skimmed the algorithm - need to try it out. There's a lot of room here. I will have to stuff it on centivik (until I have 100 000 on real money).
What difference does it make? You can do the same on a cent account having 100 real quid.
If it's the latter, it's better to put 1 dollar on the cent account and use 1 dollar to make hands and bumps. The same adrenaline will be there.
The main thing is discipline (no wagering and making sure to make intermediate withdrawals). Not making these intermediate withdrawals is a common mistake that leads to bankruptcy, even if you have excellent stats.
Have you experimented with this scheme yourself?