Trade sizing

TheTwisted

I am curious how people here do their trade sizing to reduce losses and increase profits. Is saw a post of lotzofbotz where he explain is briefly, but I would like to make it more concrete.

What I do now is look at the last five trades and base my percentage on that in general.
5 ITM: 5%
4 ITM: 5%%
3 ITM: 2.5%
2 ITM: 1.25%
1 ITM: 0.0625%

Any suggestions or advise?

lotzofbotz

The Lings MM oh man that is a tough one because you are in a martingale mentality there. Martingales always pay up front but catch you in the back later. Risk is relative and often it allows so so traders to be sloppy in their trading developing a negative mindset for poor trading. That is the real danger. Its boarderline rules based so its not horrible but at the same time it also allows for sloppy trading so that I don't like. Like a BSB that does not use martingale at all I would think its better to use none and focus on making winning trades instead.

Me I would do no more then at most a "2 step" or one based on %s

Example trades half % - 1% or 2%-4% max 2.5% to 5% for most once you go above 5% you can get hurt.

If you are going to apply that MM go back through your history of a few hundred or more trades and apply that to see what you would have made or lost. That will give you a better picture imo.

TheTwisted

How do you determine your trade sizing? I would like to set some rules for me so I can stick to them and don't waste half my bankroll on a bad day.

My idea here I don't see as martingale, because I scale down when I lose, instead of scaling up.

The idea is that I have a default trade size (in this case 5%), but when I'm losing, e.g. my ITM is below 60% in the last 5 trades, I am sizing down my trade sizes.

dear123

The only rule i have learn't while trading with optiontrade is to make effective money management by taking calculated risks, martingale is somehow easier but it could lead blow off your entire account balance in the long run. Not quite sure if scalping is a good idea for binary trading but you can hedge other binary instruments against your loses.

lotzofbotz

I calculated the %s its 100% stupid even for a good trader to use LingsBoard MM and its not because it does not keep you profitable. Its because it phucks up your account growth in scale of time your equity curve can wildly fluctuate instead of a smooth one that grows your balance. I would have on the last 50 trades with a win % of around 69.35% made @ $100 a trade about $690.00 or instead using the 2 step @ the same $100 a trade Made $760 and had less overall risk. That is not even the negative part because the numbers from one to the other are not that far off. The negative part is when you have multiple bad streaks your account balance gets wacked and is likely what happened to Lings as he does not talk about trading much anymore maybe hit one of those emotional streaks. Basically it puts you into a negative mindset that has you chasing the market trying to win instead of being focused on making good trades and growing your balance. Its a bad way to trade... Most traders can't even hold above low 60s the real negative effects of that Ling MM is when you get multiple hits or just flat equity growth can wear on your psych.