CaptainSamurai
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Posts posted by CaptainSamurai
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open a spread bet account and don't pay?
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On 02/12/2020 at 13:05, tombo85 said:
I am new to trading. After reading a book, doing some of the IG Academy and browsing online articles I invested £1000 into FX. After two weeks of daily trading I have nearly made £500.
Is this beginner's luck?
Yes.
If you cannot explain with mathematical proof why your system is effective, then you are gambling and getting lucky.
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Look under "Options for Metals, Energies"
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The reason for trading in "points" rather than direct shares is to avoid UK taxes: If you trade in points HMRC classifies it as gambling, and the winnings are not taxed.
At the end of the day it works out approximately the same as dealing in direct shares you just have to do a bit of multiplication/division to work out the exact number of shares.
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I believe in practice, once the option is opened, people tend to trade the underlying security rather than the option. Options are typically for "holding til expiry" rather than buying and selling later.
You may consider having an alert that tells you if your underlying goes above/below a certain point.
In any case, trading options is not a "set and forget" sort of operation -- you really need to be hands on and monitor your positions, margin, etc.
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You need to upgrade your account to Professional. There is a page somewhere that explains the requirements for a Professional account.
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On 22/02/2021 at 19:18, u0362565 said:
No one wants to lose but I really don't
Respectfully, I've been in this game for many years and I can tell you that if you're absolutely terrified of losing you shouldn't play at all -- you will just make bad choices.
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On 22/02/2021 at 08:16, Bopperz said:
The number is back calculated to minimise the risk of going bankrupt. It should ideally be calibrated to the win/loss ratio of your strategy.
Risking 5%, would allow you 20 losses in a row, before wiping you out. But after 10 losses you would barely be surviving, remember once you have lost half your capital, you need a 100% return, just to break even.
Basically, you want to risk a lot less than you think you should. Once you have a track record, increase it.
This is wrong.
In theory, even if you risk 10% of your balance on each of a series of trades, you will never go bankrupt.
"a lot less" is not a mathematically accurate measure.
This is exactly what I was talking about, people throw around percent numbers and it's fine if it's a rule of thumb but you have to understand that it's just a rule of thumb -- there is nothing scientific or mathematical about it.
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On 22/02/2021 at 09:43, THT said:
I'm afraid one the bad things about trading is you have to read and test a lot of the stuff out there to realise it does not work or suit your style, all the while the sharks are happy to take your £ until you fathom it out
I've seen people talk about style -- why does it matter? It seems like people use the word as a hand-wavy way to avoid illogical things they cannot explain.
"Why am I losing money" -- > "Oh this method doesn't match my style"
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THT, when is your motivational book & seminar coming out... 😜
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The 1% rule is often parroted around but the people who propagate it rarely understand risk. If someone is telling you "only risk 1% per trade", I would follow up by asking why 1% and not 1.2% and not 0.7% -- their answer will demonstrate how clueless they are.
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Position sizing-why not go low
in General Trading Strategy Discussion
Posted
In theory, if you take a potato and repeatedly cut it in half, each time throwing away one piece, you never run out of potato...
The point is that you need to adjust your percentage to however much money you have left.