【Trade Battle Weekly Report Week 2】～About Risk Management～【Dental Engineer Trader Nushi vs Calligrapher Trader Tomoaki Kuramoto's Trade Battle】
The trading battle that started on February 1st has
completed its second week!
With that, I would like to report the results.
Here are this week's entire trade history.
It looks like this,
I don’t think this is a satisfactory result for me
personally.
When it comes to competing against others,
emotions I had never felt before started to influence my trades,
and there were moments I became emotional (;´・ω・)
After I couldn’t take profit by just 1 pip and the price reversed strongly leading to a stop loss,
I was extremely regretful,
and I thought, I have to make it back! I must recover! (;^ω^)
This is completely a bad mental state!
Subsequent trades were lacking in calmness
and I entered in places I wouldn’t normally
and expanded losses ( ノД`)
When I trade alone as usual, this doesn’t happen, but
the pressure of not wanting to lose in the trading battle
got to me (-_-;)
As everyone,
without competing against anyone
within your own acceptable risk range
I hope you trade casually and enjoyably!笑
Additionally, I wrestled with capital management.
Usually I trade with my own money, so
I can trade with a fairly generous lot size relative to my account balance,
so I don’t have to constantly calculate lot sizes, which is convenient.
However,
this time I needed to increase my funds by more than 1,000,000 yen
so I must manage the lot sizes carefully.
Lowering the lot size reduces risk but also reduces profits, making it hard to win the battle.
Raising the lot size increases profit and improves chances of winning the battle, but
the risk increases, and the damage when a stop is hit becomes larger.
Furthermore,
if increasing the lot size causes a big hit to the account balance,
the remaining balance also drops
so the next trade you won’t be able to raise the lot size.
For example, suppose you lose 50% of your account funds,
what percentage profit is required to recover to the original amount?
Of course, not 50%.
To double the account funds, the answer is 100%!
If you lose 50%, you must regain it with 100% profitability.
A 100% profit rate is something that only professional traders
in a favorable market environment
with their method fully fitting can sustain with a 25x leverage and full lot size!
Therefore,
after a big loss, recovery is quite difficult.
Losing happens in an instant, but
recovery takes more time than you can imagine.
For that reason,
my private account usually has ample margin for trading, and
when teaching others,
I advise not to increase lot sizes too much
and to trade with risk controls!
So,
it’s been a while since I focused on lot size management (;^_^A
Also, in my case,
I sometimes hold positions on four currencies at once.
If you start with too large a lot size,
while you hold those positions,
if another currency presents an opportunity,
you won’t be able to enter anew.
That would be a loss of opportunity, so
I want to avoid that.
Also, I use a technique called split entries.
For example,
after the first position gains,
I add more on a tighter retracement.
In this case,
February 8th, the pound-dollar pair.
First I entered 0.5 lots,
then added another 0.5 lots,
then another 0.2 lots in three bursts
and when profits were on,
I closed two of the 0.2 lots, leaving the remaining two to run for further profits.
The remaining two were held to extend profits.
Unfortunately, the two held moved against me and hit stop loss. Haha
I only perform this kind of average-in when I’m extremely confident,
and I tighten my stop-loss rules so that even if everything is stopped out, I can endure it.
So,
please do not imitate this!
Averaging-in increases profits when you take profits, but
the losses when stopped out also become larger!
If you do it poorly, your account balance can blow up,
so please be very careful!
Trade Point Commentary
By the way, the February 8th pound-dollar entry
explained with images is
that right after the blue rectangular zone breaks downward
I entered a sell for scalping.
Then,
when the rectangular zone broke above again,
I bought on the subsequent pullback and rise.
As for the basis of the entry,
it is explained in the February 8th live streaming of the Lyman Trade FX,
so watching the video will be easier to understand.
So,
Trades: a lot How do you calculate the pips for split entries? Total profit and loss: 38558 yen
In total,
a profit of 50699 yen.
If I hadn’t become emotional midway,
I think there would have been fewer unnecessary entries,
and profits could have been higher.
My own weaknesses were exposed.
But it was a good learning experience!
To become stronger,
start by acknowledging your weaknesses.
Daily discipline, daily training, daily evolution!!
Thank you for this week as well m(__)m
See you next week too!!!
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