Profit Percentage
I was thinking earlier regards to profit percentage… Let’s say for arguments sake you start off with a Bank of 100 pounds what would be your max amount for your first Trade and what percentage of profit would you be targeting from a 1 day trade with the 100 pound bank
Your stake depends on a number of factors, such as the sport you're trading, the price, the volatility of the market, your confidence in the trade, etc.Rolandbk5 wrote: ↑Sat Feb 20, 2021 8:23 pmI was thinking earlier regards to profit percentage… Let’s say for arguments sake you start off with a Bank of 100 pounds what would be your max amount for your first Trade and what percentage of profit would you be targeting from a 1 day trade with the 100 pound bank
Generally, stakes increases with shorter-price trades, it decreases with volatile markets where the price moves rapidly or far. Experienced traders can have more confidence that they've spotted a good opportunity and that will affect the size of your stake. But as far as price is concerned, with all other factors being equal, I'm likely to have twice as much on a 4.0 trade as I would on an 8.0 trade. The most important thing isn't how much you stake but how much you're risking if the trade goes against you to the point where you have to close for a loss.
I don't think targets are a good idea. It's like a hot dog man having a target of selling 100 hot dogs - he can only sell to however many hungry people go to his van, and likewise, a trader can only take what's on the exchange. When I started trading I was asking myself the question will I make anything, nevermind how much. It took me five years to get an idea of how much potential there is for me in the exchange.
Can only really second the answer from Derek. I would also say that depending on where you are in you journey it can pay to be more defensive than offensive minded, for example focusing more on the liability you're comfortable with rather than the profit that you want. That way you go into trades with eyes wide open and don't panic at the first sign of red. It also helps to take emotion out of things as you've already factored into your thinking the max loss you'd happy to take.Rolandbk5 wrote: ↑Sat Feb 20, 2021 8:23 pmI was thinking earlier regards to profit percentage… Let’s say for arguments sake you start off with a Bank of 100 pounds what would be your max amount for your first Trade and what percentage of profit would you be targeting from a 1 day trade with the 100 pound bank
- ShaunWhite
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Thinking in terms of 'bank' isn't very helpful. What is a 'bank' anyway? Is it an amount you have in your BF account which you top up, or the total amount you intend to invest in learning to trade, or your entire net worth?
What is important is...
1. How much do you want to risk losing if you have a technical problem and can't close your position.
2. Max planned loss on any individual trade.
Don't think in terms of your return in relation to your bank, it's related to the amount of money you've turned over (sum back bets + sum lay liabilities) which will probably be many times the amount of your account balance. A decent return might be in the region of 2%-5% of turnover range but that depends greatly on your style of trading. Might be 0.1% or 10%.
What is important is...
1. How much do you want to risk losing if you have a technical problem and can't close your position.
2. Max planned loss on any individual trade.
Don't think in terms of your return in relation to your bank, it's related to the amount of money you've turned over (sum back bets + sum lay liabilities) which will probably be many times the amount of your account balance. A decent return might be in the region of 2%-5% of turnover range but that depends greatly on your style of trading. Might be 0.1% or 10%.
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- Joined: Sun May 10, 2020 12:55 pm
Totally agree, a bank is meaningless in a way, I only traded £3 and £5 lays mainly on Saturday and Sunday, I doubled my bank.................. but it was only £100 ............. if you let the "bank" get larger and larger then the "bank" is going to get higher and your £ % much lower. Therefore I think your point is well made.ShaunWhite wrote: ↑Sun Feb 21, 2021 3:39 pmThinking in terms of 'bank' isn't very helpful. What is a 'bank' anyway? Is it an amount you have in your BF account which you top up, or the total amount you intend to invest in learning to trade, or your entire net worth?
What is important is...
1. How much do you want to risk losing if you have a technical problem and can't close your position.
2. Max planned loss on any individual trade.
Don't think in terms of your return in relation to your bank, it's related to the amount of money you've turned over (sum back bets + sum lay liabilities) which will probably be many times the amount of your account balance. A decent return might be in the region of 2%-5% of turnover range but that depends greatly on your style of trading. Might be 0.1% or 10%.