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Hi Troy
My view:
You are undercapitalized.
If you begin your trading with 5 consecutive losing
trades, you'll be down 25%; in real-time trading, this brings
an untold amount of psychological pressure which often
leads to a breach of discipline.
My advise would be to stay out of the S&P until you have
enough capital so that a 2% stop does not expose you to
risk of ruin.
all the best
ray
R Barros
101/25 Market Street
Sydney NSW 2000
Australia
Voice: 612 92673470
Fax: 612 92673478
E-Mail: ramon@xxxxxxxxx
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> From: Troy Kelley <tkelley@xxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: GEN: Account size and stops
> Date: Wednesday, May 13, 1998 1:14 AM
>
> RTs,
>
> Anyway, I am buying 2 S&P contracts with a 10 grand account. (Actually,
> I was told I could do this if I day trade only, but I haven't actually
> done it yet, so I might not be able to buy 2 contracts with 10 grand).
> The common wisdom is that your stops should be 2 percent of your
> account. But that makes my stops too tight. Actually, I have been using
> about a 1 point stop or 500 dollars with 2 contracts. Now that makes my
> stops about 5 percent instead of 2 percent. Now I am still making money,
> but I am going against conventional wisdom of a 2 pecent stop.
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