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Thanks Mike.
I must admit I present on a regular basis but I've never done a webinar. It was a bit odd to just speak into a mic and not get any immediate feedback from a 'crowd'.
Walking away I couldn't tell if people hated it, or loved it. So I'm glad to see some positive feedback
Thanks for the opportunity to share some parts of my journey.
Cheers
Yesterday's excellence is today's standard and tomorrow's mediocrity
Leverage or not, the trader controls the actual $ amount of risk. Assuming you use stop losses of course.
For me, out of the money I put into my broker account, I limit my risk to a maximum % per trade.
This is around 1% max at the moment, so if I have a 100K account, that would be a $1,000 MAX loss (incl commissions).
To make math simple let's ignore commissions and say that this is 50 points in the NQ.
So then I would take a look at the trade, is my stop loss going to be ~26-50 points below my entry point? then I can only use 1 contract
Am I going to have a tighter stop loss because the way the market is moving, let's say 5 points below my entry? Then I can enter in with 10 contracts. 10 points below my entry? 5 contracts.
In all 3 scenarios above, the $ risk is the same, and the % risk to my overall account is the same. Yes the likelihood to walk away with a winner will vary, but you can't control that. But risk is almost always under your control, assuming a liquid market.
For me specifically, my data tells me that my typical risk is actually a low lower, at ~0.4% per trade.
Right now for me it's easy because I mostly trade one contract, there are very few times when I trade more than 2 and usually I've scaled into a position so most of the time I'm actually no longer risking any of my capital by that point.
News is a bit trickier of a question to answer. Personally, I like to be aware of as many news at a macrolevel as reasonably possible. News are an extra data point and depending on other things going on in the market, they may or may not be impactful. This is the same for news itself, sometimes news will be very impactful to the market, other times they won't move it at all. It's not usually the be all end all.
Do you have something more specific in mind regarding my approach to news? That would be a lot easier for me to answer I think.
Yesterday's excellence is today's standard and tomorrow's mediocrity
I think that the approach to trading with most new traders is flawed because it's driven by the wrong motives. The motives to make a quick buck are more present than wanting to improve and become a better trader. People don't realize how big of a dog eat dog environment the market is, specially when all the other dogs are so much bigger, better, and faster than you.
So they come in, looking for these indicators or try to copy someone else's methodologies. Not realizing that all of those very small and tactical details that make someone else successful, aren't very effective without the right big picture strategic foundations.
I hope that this can help traders think less about very tactical things such as indicators, and charts. So that they can start thinking more about things such as how to manage risk, and move forward on their journey to improve, however slow/fast that might take.
Cheers!
Yesterday's excellence is today's standard and tomorrow's mediocrity
Regarding news, I was surprised to hear you trade news as a beginner. I am eager to sit out all the major news/market moving events: FOMC and NFP mostly, but eager to wait out others as well as I learn more. My question is along the lines of where do you find the confidence to be in the market during large events like FOMC and NFP? I just find it too risky, and don't mind waiting for set ups later on in the day.
Now, regarding risk. I really don't think we control how much we lose, particularly when leveraged. You mention liquidity, but in instances that can go away, like a Flash Crash. It seems to me one could lose a lot, if not all, gains from an extended time period should the market collapse when one is in a trade? Honestly, I am having a hard time justifying the risk of say a North Korea bomb or a California earthquake, and even another Flash Crash, that could wipe out all gains and leave me indebted, seriously indebted. Where would that stop get you out?
Maybe I am making too much of this. After all, so many are day trading futures, but I do wonder of the risk of ruin from a business standpoint. It seems insurance in the form of options would be too costly given trading 1-3 contracts. The only other alternative I can think of is trade short only, and that would be really tough odds wise.
I am really glad there is a space for this conversation. Thanks.