Michael is it true that you add to loosing trades 90% of the time. And is this stratergy good for beginning traders?
Trader 1:
•Worst Case Scenario: Trade goes against position, 2nd trade is taken, then trade continues towards stop loss, so 3rd position is taken. Our total risk is 2% X 3 positions for a total of a 6% loss.
•Best Case Scenario: Trades go against trader, but just enough to get 3 positions into the market and then market goes into full t/p for each of the 3 orders. Total risk is 6% but gain is 6%.
•Alternate Scenario: Trade just goes into profit without drawdown. 2% risked for a gain of 2%.
Trader 2:
•Worst Case Scenario: Trade goes against initial order all the way to stop. 2% risked, 2% Lost
•Best Case Scenario: Trade goes in favor of order, second trade is taken and first stop is moved to b/e, and then trade continues in favor to 3rd order which now places first stop at second order b/e. Total risk=0% Total gain=6%. Keep in mind, that the worst possible risk at any time during this process is 2%, but never more because new orders are opened, older orders are adjusted.
•Alternate Scenario: Trade just goes into profit, all the way to the third order, and then reverses and stops everything out. Total Risk=2%, Total Loss=little more than 1% (1st order is +20 stop at third order opening, 2nd is b/e stop, and 3rd has the risk of full s/l)
So in the case of the two traders, you can see that in the market conditions being relatively the same, the first trader has a max risk of 6% and a minimum risk of 2% EVERY TIME. Trader two on the other hand has a max risk of 2% and a minimum risk of 0%. That right there should be enough.
In regards to the $500 you did return to me, this was after you blew up that small account of $500 in just 1 week flat. 100% of the account gone. Were was good money management here. I will post a copy of the meta trader history showing how you did that. As I remember I got the account up above $600 when you said I should hand the account over to you. Then you proceeded to hedge it into a corner until there was a margin call. Previous to that I did ask LJ to help me with a $1500 dollar account (which he managed for 3 weeks) and as you can see on the account history we did make some profit but the the account margined out again after 3 weeks. There was no refund of funds as I would not expect him to refund this. as agreed this would be at my own risk. But you decided to refund the $500 as I guess you felt bad about loosing the account in just 1 week flat. This was during the time I was with forextraderoom.net as you had given me free access to that live room due to the loss of the $27 000 and you were trying to infact help me. Unfortunately my time with you resulted in more losses.
