February 1 (Wednesday): Nikkei 225 (Free viewing item: How to determine Lot size)

Good morning☀

Yesterday

Money-Management is more important than Method!

That was the topic.

Now, this time we’ll talk about how to determine Lot size.

Even though I’ve discussed it before, I’ll include a linkｗ

'Your own convenience' vs. 'Market convenience'?

https://www.gogojungle.co.jp/finance/navi/articles/41479

How to determine Lot size

① Decide the position of the Protective Stop based on 'Market convenience',

② Set the risk of the total assets to a percentage as the [Maximum Tolerable Loss Amount],

③ From there, calculate and determine the Lot to enter.

④ If you’re averaging down, split the Lot calculated in step ③.

When you calculate and determine the Lot like this, in a certain salon’s teaching there were

many surprising reactionsthat came back!!!

?????????

“With such a small Lot, you won’t make any money at all!”

Amateurs focus on profits.

Pros focus on losses.

Pros manage losses thoroughly,so even if you cut losses, you can still make money overall.

However,amateurs worry about each individual trade’s profit and thus close their eyes to losses.

Therefore, even when the unrealized loss exceeds the [Maximum Tolerable Loss Amount], they wait for a profit (most amateurs don’t even set a [Maximum Tolerable Loss Amount], though??).

Thus it becomes a deadlock of losses.

A typical slow-and-steady-to-bust scenario, right?

Why set the Total Assets risk at 2% as the [Maximum Tolerable Loss Amount]

That is the relationship between loss and return to get back to break-even.?

A 2% loss can almost be recovered with ~2% gain.

Therefore, those who aren’t consistently earning should

first set the [Maximum Tolerable Loss Amount] not to exceed 2%.

I think profits or losses won't change much even if you go through cycles?

While you’re not used to it, 0.5% or 1% is fine, I think.

In fact, I also0.5% → 1% → 1.5% → 2% increased risk gradually.

Raise Lot sizes exponentially!

I’ve seen salons and communities teach this a few times, but…

That is a big mistake ????

If the Protective Stop position changes every time, what happens when you scale the Lot exponentially?

It only leads to ruin, right?

Therefore amateurs, such thinking is for amateurs ????‍♂️

（Note: below, market awareness is limited to members。）