Tradersvoices

Daily Wisdom 59 - Streaks, can you survive them?

Education
NYSE:SNAP   SNAP INC
It only takes a few consecutive trades to wipe you out. Ensure that never happens.
I don't make predictions about the market. I trade based on what price is doing NOW versus my interpretations of past data.

Comments

Not true.
If you Risk 20% and let's say your capital is 100 USD, this is what it will happen.

Trade 1) Balance (100 USD) - lossing trade (20%) which is (20 USD) = (Balance after the loss) 80 USD
Trade 2) Balance (80 USD) - lossing trade (20%) which is (16 USD) = (Balance after the loss) 64 USD
Trade 3) Balance (64 USD) - lossing trade (20%) which is (12.80 USD) = (Balance after the loss) 51.20 USD
Trade 4) Balance (51.20 USD) - lossing trade (20%) which is (10.24 USD) = (Balance after the loss) 40.96 USD
Trade 5) Balance (40.96 USD) - lossing trade (20%) which is (8.19 USD) = (Balance after the loss) 32.77 USD

After 5 trades with 20% risk per trade, you won't blow up your account, you will lose 67.23% of your account which is 67.23 USD.
+8 Reply
Aivabtc Sepz2020
@Sepz2020, that is only if you enter each trade after the previous one got hit with SL. Usually you have multiple trades open in different markets.
+1 Reply
Sepz2020 Aivabtc
@Aivabtc, Correct but if you do that with 20% risk per trade, you are out of your mind! It is just pure insanity.
Reply
@Sepz2020, Yes you're right, I was making the assumption that you're still using 20% of the original account value ( $20 per trade). However, losing 67.23% of your account is still devastating, no?
+1 Reply
Sepz2020 Tradersvoices
@Tradersvoices, That's right. $20 per trade risk ... then yes, you are 100% right. But 20% is more manageable. And yes of course losing 67.23% of your account is just heartbreaking. Other than that, I have to say good posts. keep them coming! :)
Reply
JWoo2242 Sepz2020
@Sepz2020, Not sure why people have such a hard time with spelling losing. Not loosing or lossing.
+1 Reply
Sepz2020 JWoo2242
@JWoo2242, Good eye. Sorry. You are right, my bad! :)
Reply
Good point..Fairly new to trading so I’ll keep this in mind. Thanks!
+2 Reply
'I don't make predictions about the market. I trade based on what price is doing NOW versus my interpretations of past data'.
This is good advice!
+2 Reply
Greet work.thank you for Sharing this wonderful information. It really helps me as a beginer keep going stay awesome.
+1 Reply
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