a lot of people are telling you to avoid leverage because its an easy post to get likes on currently.
Cobie said it so everyone will echo it.
I'll give you something different.
learn position sizing and account risk.
Cobie said it so everyone will echo it.
I'll give you something different.
learn position sizing and account risk.
for the purposes of this conversation
position sizing = total percentage you have to allocate in dollars
account risk = the risk of your entire account balance.
the most obvious thing here is don't use your net worth as a balance. being in debt because of crypto is unacceptable
position sizing = total percentage you have to allocate in dollars
account risk = the risk of your entire account balance.
the most obvious thing here is don't use your net worth as a balance. being in debt because of crypto is unacceptable
sizing a position can be hard. What I usually tell people is to pick a standard size for your bet and stick with it.
It is easiest to use percentages to size because as your account grows, so does the dollar amount returned from a win, so does your bet
It is easiest to use percentages to size because as your account grows, so does the dollar amount returned from a win, so does your bet
ie
you have 5k total account balance you decide 5% net value or $250 is what you're comfortable with per trade
you make 30% on that lot or 75 bucks. it increases your total account 5075 and your next lot size is ~254.
and so on.
you have 5k total account balance you decide 5% net value or $250 is what you're comfortable with per trade
you make 30% on that lot or 75 bucks. it increases your total account 5075 and your next lot size is ~254.
and so on.
if you lose that full amount somehow, you've lost only the initial 5%. rather than being 'rekt'
the next obvious thing is that leverage on that 5% makes sense in this context because you're only at risk of losing 5% right?
the next obvious thing is that leverage on that 5% makes sense in this context because you're only at risk of losing 5% right?
well kinda and only if you're disciplined.
1.) you have to segment your fund so you're not tempted to add to it or do cross leverage
2.) you have set it at a low enough number that you're not likely to get a call 5x probably fine, 40x not so fine.
1.) you have to segment your fund so you're not tempted to add to it or do cross leverage
2.) you have set it at a low enough number that you're not likely to get a call 5x probably fine, 40x not so fine.
3.) you have the mentality not to revenge trade when you lose. this is the root of why some people will warn you off leverage.
gambling effect.
'gotta make it back in one trade'
to be blunt, if you lost a bunch, you're more likely to just compound said losses than break even
gambling effect.
'gotta make it back in one trade'
to be blunt, if you lost a bunch, you're more likely to just compound said losses than break even
im going to pause here.
let me know if I'm rambling or if this is useful.
let me know if I'm rambling or if this is useful.
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