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At 03:19 PM 7/31/98 EDT, CalaxCorp@xxxxxxx wrote:
>In a message dated 98-07-31 08:40:58 EDT, you write:
>
><< Subj: Re: FUTR: Day/Swing trading
> From: SP Broker1
>
> << Peter,
> Why is the larger the account size the better (assuming the same number of
>contracts)? Doesn't that mean one may end up losing more capital?
> Bill W>>>
>
> Hi Bill,
> The larger account size eliminates (to some degree) the "fear" factor of
>trading with an undercapitalized account. It is very important for what goes
>on in your head.
> Peter
> >>>>>>>
>
>Peter,
>
>Thank you for your explanation.
>
>(1) I think for the "fear" above, you are talking about the "account size"
>being the only trading capital available to the trader, therefore creating
the
>fear of "losing everything" and the resulting stress, affecting the trading
>decision of the trader. Right?
>
>(2) What if there is other available risk funds, but it is just not in that
>particular trading account at that momemt? Would that mean then there would
>be less "fear"? That means the smaller account size is not a problem?
>
>(3) Is the following another consideration-- If the "account size" is
>adequate, so the broker would not have to monitor it so much, so that in case
>there is a series of bad trades, the intraday/overnight drawdown would not
>turn the account balance into a negative, forcing the broker to make a margin
>call or to liquidate the losing position, thus giving the trade a chance to
>recover back to profitability?
>
>(4) So a large account size is good for the brokerage/clearing firm--less
risk
>and less work. But is it actually good or bad for the trader if his fear is
>not a factor?
>
>Thanks in advance for any clarification.
>
>Sincerely,
>BillW
>
>
>
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