Do this before you risk your real money! - page 2

New comment
 
Ryan L Johnson #:

That is 100% true. That also happens to be the reason that undercapitalized traders shy away from such strategies, while many professional traders and proprietary trading firms cap risk per trade at 1 to 2% of account balance. I'm in no way suggesting that you are undercapitalized nor a beginning trader, but the fact remains that the overwhelming majority of beginning traders seek to compound their small deposit exponentially within a short period of time─hence, the ill informed popularity of Martingale strategies among that crowd. IMHO, their goal is to trade instead of working for a living without realizing that profitable trading is more work than anything else. This is coming from a guy who worked his way through law school, by the way.

I've repeatedly freely offered a deeply tested, conservative, profitable strategy/EA to beginning traders and very few have even considered using it. I've actually come to expect that now when I offer to share what I can. I respectfully remind those traders that at least 85% of retail traders lose money annually. If we throw in the number of traders who break even or earn mere pocket change, that statistic is probably closer to 95%. Following that logic, the aforementioned conservative strategy falls within the top 5%. If anyone here has been "experimenting" with high risk strategies in their quest for high returns for the past 3 years or so, it's probably time for them to acknowledge who/what they're up against and the statistics surrounding them/it.

Yes, exactly. The foundation of this market is psychology.

Most people—especially beginners—care only about profits and ignore everything else. A big reason for that is all the fake marketing and unrealistic promises they've been exposed to, such as turning a $1,000 account into $10,000 in just two months.

The natural result is that the vast majority end up losing money and are drawn to high-risk strategies that may generate amazing returns for a month, but then wipe out the entire account the following month or a few months later.

At some point, many traders are no longer in the market to make money—they're simply trying to recover their previous losses. Unfortunately, that usually leads to losing even more.

I believe this is something that should be made clear from the very beginning. In this business, you either need a sufficiently large amount of capital, where earning 2–3% per month is meaningful in dollar terms while keeping drawdown under control, or—if you're starting with limited capital—you need to set realistic expectations based on reality, not marketing.

And even then, those expectations should only come after you've gained enough experience in trading and developed a solid understanding of how the markets actually work.
 
Davoud Mokhtari #:
Yes, exactly. The foundation of this market is psychology.

Most people—especially beginners—care only about profits and ignore everything else. A big reason for that is all the fake marketing and unrealistic promises they've been exposed to, such as turning a $1,000 account into $10,000 in just two months.

The natural result is that the vast majority end up losing money and are drawn to high-risk strategies that may generate amazing returns for a month, but then wipe out the entire account the following month or a few months later.

At some point, many traders are no longer in the market to make money—they're simply trying to recover their previous losses. Unfortunately, that usually leads to losing even more.

I believe this is something that should be made clear from the very beginning. In this business, you either need a sufficiently large amount of capital, where earning 2–3% per month is meaningful in dollar terms while keeping drawdown under control, or—if you're starting with limited capital—you need to set realistic expectations based on reality, not marketing.

And even then, those expectations should only come after you've gained enough experience in trading and developed a solid understanding of how the markets actually work.
I only hope that such traders will understand what we're saying instead of taking offense to it. A wise man once told me as a kid that it's much easier to feign stupidity than admit wrongness. In that case, there's nothing to be shared.
 
Ryan L Johnson #:
I only hope that such traders will understand what we're saying instead of taking offense to it. A wise man once told me as a kid that it's much easier to feign stupidity than admit wrongness. In that case, there's nothing to be shared.
Exactly, you’re absolutely right!
12
New comment