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| Why Won't I Double My Account Every Month? https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=1502 |
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| Author: | WideEyed [ Wed Feb 20, 2013 1:01 pm ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
What do you calculate as your maximum DD? |
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| Author: | Jason [ Thu Feb 21, 2013 2:22 am ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
I can't say for sure. At this point in time whenever I'm straight out wrong, I'll be wringing my head to find out why. It's difficult for me to think of my trading in a probabilistic manner at this stage because I don't have enough experience and can't backtest. |
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| Author: | WideEyed [ Thu Feb 21, 2013 9:53 am ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
Therein lies the flaw. |
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| Author: | Jason [ Fri Feb 22, 2013 1:13 am ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
I guess other traders who rely on fundamental analysis get around not knowing their maximum DD by only risking a tiny amount and end up making very little. |
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| Author: | mjws00 [ Fri Feb 22, 2013 1:30 am ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
The bright ones papertrade and may use demo for years. Others blow an account or two. It takes significant study and screen time to be able to fully understand the global economy, all of its nuances, and the effects fundamental news may have on the psychology of traders. Remember the markets seldom respond to the face value of the news. The smart money has built in the news retail people see. The short termers are playing the response of the markets to the news... not the news itself. So yep. You either bet very little and survive to get an understanding of your skills and sample set. Or increase your size and roll the dice. You can actually test the fundamental effects news has somewhat quantitatively, but you have to study the data from the exact event over many periods and try and subjectively or statistically figure out the effect over many instances. So look at predicted vs actual for a single event say "non-farm payrolls" over the course of the last 15 years... the challenge is correlating it with other macro economic news that may have been going on at the time to skew outcomes. But many true experts can tell you about those effects, those that lived through it and were actively studying it for years will remember. The effect news has on a live trader are profound in terms of memory and patterns are immense. ( Those scars and patterns are what we technical guys feed off  ) |
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| Author: | nanningbob [ Fri Feb 22, 2013 4:44 am ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
The math is very simple if you try to gain 100% a month you can also lose 100% every month. It only takes one real bad decision to wipe out days or even weeks of work. The market can kill at any time. So whatever you set out to win you can also lose. It is like playing poker and going all in every time you think you have a good hand. Sooner or later someone else has a better one and your stack is all gone. I always trade in such a way that I live to trade again. Keeps me in the game during its highs and lows. |
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| Author: | Jason [ Fri Feb 22, 2013 6:58 am ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
mjws00, yeah looking back at single events can help a bit. It's just that getting all the data that I look for is impossible. I'm stuck with looking forward mostly  nanningbob, I definitely wouldn't risk so much that I could lose everything in a month. I'd have to be on drugs to take that kind of risk |
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| Author: | macman [ Fri Feb 22, 2013 8:13 am ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
Nice post -  Let me just a couple of points here, that may help. Firstly it is not possible to "fully understand the global economy." Large institutions like banks have separate departments staffed by experts for each area to try and do this, and they often get it wrong. As an example, look back to Monday August 6th last year when the Prime Minister of New Zealand made an unscheduled remark about the NZ$. I guess his press officer was on holiday at the time  Nobody could have anticipated that. Secondly retail traders see NFP etc as 'fundamentals' when in fact they are just part of the forex game. Smart money knows the numbers coming along probably weeks in advance; it is the rest of us who get the surprises. Thirdly trading true fundamental shifts is way beyond the capabilities of most retail traders. As an example retail platforms (mine anyway) flagged up the recent Yen devaluation on 9th January. To take advantage of that situation would have meant keeping trades open for months - how many retail traders can do that? Interesting it is rumoured that George Sorros made a $1 bill profit in this time frame. Just some food for thought here guys which I hope you find interesting .. |
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| Author: | Jason [ Fri Feb 22, 2013 9:44 pm ] |
| Post subject: | Re: Why Won't I Double My Account Every Month? |
I only know what will probably happen within a span of a couple of hours. However, sometimes there are things that are relatively permanent until something acts to change it. Those are the times when a trader can hold a position for a month and make money with a decent chance of profiting. |
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