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Sure. I get where you are coming from. If you had $50,000k at your disposal allocated to trading ES, but you only activated $5,000 of that into your trading account, sure, that could work I suppose, but you will lose flexibility to add to existing positions and makes a swing trade impossible. Stops you from making a huge error though I guess.
I wouldn't imagine many traders here allocate chunks of capital to their account that way, but you never know. I don't, but then again I have always been all or nothing!
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- Trade what you see. Invest in what you believe -
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Indeed JonnyBoy, and that's why I stressed "especially at the beginning". I think when you have 'modeled' the trading style you want on a small account then you should be able to risk more.
But I have heard horror stories (here and in other forums) of people losing tens or even hundreds of thousands in just a few weeks/months. By limiting the amount of capital you have to play with when you're starting, you should at least limit the temptation.
Yes, I agree. And of course you never know when the next flash crash event will happen and your stop gets skipped - you could be wiped out in seconds. I remember the May flash crash event very well. I was not in the market at that time but a trader friend of mine was and boy he was hurting the next day.
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- Trade what you see. Invest in what you believe -
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