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TFC Commodity Trading Forum

Re: CH12

You are right, I am under capitalized. I only have about 12K, that I very slowly, and carefully built up from 5K.
In todays world, when you are starting with that little amount of money, 1 or 2 losses in a row blow out your account.
I'd rather take a bunch of small slices I KNOW I can take, than gamble on bigger trades that I only have a 50/50 chance of winning.
Trading for a small account, is different than trading for a big account. You have to be very careful about risk management,
When I have 50K, then i can just trade the same signals, on larger timeframes, because I can afford to weather the drawdowns that occur.

I have to be honest though, the way I do things has some advantages. For example, on most trades I am only in for short amounts of time. I generally get the bulk of the day's move, or at least that swing of it, with relative ease. Then, I am out of the game with no worries in the back of my mind that I have money at risk in the night markets while I am sleeping or off trying to enjoy myself in other activities.

What I am considering doing, is instead of trading larger time frames when I can afford to carry through larger draw downs, I am thinking maybe of just doing what I do do now, and using more contracts. That way, I still maintain the ease of stress free success that I have come to enjoy, AND have the benefit of not being exposed when I am not there to watch the markets. Plus, if I ever find myself in the middle of a situation where my FCM just went "MF Global" on me, the likely hood of being stuck in a contract I can't get out of is minimal, because chances are I would not be in, in the first place.

Using a system that rides the current of a strong wave of price momentum and exits when it shows signs of exhaustion, in short intraday time frames, have the advantage of not exposing your account to unexpected market conditions the rest of the time. If I am on the side lines 90% of the time, the odds are I will miss catastrophies that may really hurt guys who trade long trends and are in contracts for days, weeks, or months at a time. Thge odds are great, that I will be out when unforeseen market moves happen in the wrong direction.

People day trade for a reason, and risk avoidance due to the limited time you are exposed to said risk is a huge reason people do it.

If I trade 50K of capital at a time, my $271of wins from yesterday ends up being $5962.00

The margin on Wheat is $2250. With 50K you can control 22 contracts at once. Making 5k in a couple of quick, easy, stress free day trades, with only very short times of risk exposure is nothing to sneeze at. THAT is my end goal.

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Re: CH12