ฝัง
- เผยแพร่เมื่อ 23 พ.ค. 2018
- Presented at the May 2018 Online Traders Summit by Ryan Jones.
Every time you make a trade, you are making a critical decision that has the greatest impact on your overall success or failure as a trader. That decision is trade size. Most traders don’t spend a lot of time or effort to understand why this is so critical. Instead, they rely on their intuition, or worse, the “never risk more than 1% - 2% of your account on any trade” rule. That rule, by the way, sounds great. It sounds logical. But, in the long run, it WILL cost you thousands, if not tens of thousands of dollars.
This presentation is an eye-opening presentation on why trade size is so important to both survival and extraordinary growth, and why even most trading gurus have it wrong. More importantly, it will show you the fastest and safest way to grow a small account into a large account.
• Why Most Traders are Dead Wrong on Their Trade Size Decisions
• The Devastating Effects of Wrong Trade Size Decisions
• How Wrong Money Management Can Sabotage a Great Strategy
• Fastest, Safest Way to Build a Small Account into a Large Account
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Ryan you rock, Brother! I am more excited than ever about my trading success. It's been years in the making.
LS Mong, Ryan Outstanding Core Point. Felt like you were speaking to me one on one. Enjoyed Enormously ! Larry S.
I think most of you are missing the point. It's all about compounding. Eventually, it would become exponential. If you go through a losing streak, you reduce your trading size accordingly. I think this is the best way to succeed in trading. Problem is, most traders don't understand math well enough.
Exactly!!!
You MUST have edge to utilize money management principles.
If you're trading a futures contract- you can not fractionally increase the trade size. If you start with 1 contract- you can't trade 1.1 contracts on the next trade the only way to increase trade size is to exponentially increase your trade size by 100%= 2 contracts. Or it allows you to take a trade with a risk higher than you would have previously taken based on a fixed stop loss level. You can most certainly do this with individual shares and due to different strikes- option contracts would also work. I think the only real flaw with the reasoning is the 2 to one win to loss ratio, winning double (reward) the amount then you lose (risk). Some traders only take a trade if the win to loss ratio is 4 to 1- but those traders results are way less then 50:50
(and can be and still be profitable).
Most systems I trade have an equal risk to reward ratio- but I achieve a higher win ratio which I desire psychologically.
I think you still could buy 2 and put your stop loss based on the amount you are risking
@@khalednabilcs Then your stop is lower per contract, which sounds good, but makes that stop actually more apt to get hit .....
I agree. The jump from 1 contract is proportionally HUGE. If you go from 1 to 2 contracts, your strategy better bring you a series of nice winners so you can stay at 2 contracts for a while before going to 3 and so on. Since the post was written, there are now micro contracts. 1 standard contract = 10 micro. So you could trade in micro contracts, but then commissions really start to make an impact. You could trade 10 micros then build up , start with 1 standard then 12 micros, 14, 18 micros, then to to 2 full contracts.
@@Torus2X The minis for Stock Index and energy are all good- but others have poor volume and the fills are horrendous. Micro Bitcoin has HUGE slippage that can literally turn a winning system into a loser .....
While I wholeheartedly agree that money management is of paramount importance, and that most (especially novice) traders (or investor types) ignore it (or most likely don't even know it exists), what you have presented is NOT a "Trading Plan". It may be a goal. An objective. And an extremely worthy one. But this is not a "Plan".
Furthermore, trying to keep the drawdown to $500 or less when an account size reaches $100K or more is absurd. At $500K it’s absurd AND insane. That’s only one tenth of one percent! And your only half way to the proposed $1M mark.
I'd be willing to bet that Ryan Jones makes a lot more money from speeches and presentations, as well as selling his courses than he does trading anything.
At the very beginning of his presentation he states:
“It wasn’t three weeks later that I had nearly blown out that $23,000 account”
“In fact, I was 14 hours away from graduating college and I had to drop out, because I had blown out my tuition money”
REALLY?
I ask you, how can anyone be only 14 hours away from graduation and have to drop out because they have blown out their tuition money? You don’t pay for tuition after you graduate. You pay for it before you even start classes. Otherwise you wouldn’t be able to attend! This is total BS.
He goes on to say “I had a family, I had a full time job, and I was going to college”
I ask, what kind of college? What was the curriculum? When I was studying Landscape Architecture & Architecture at U of ILL, I was married but no children, my wife worked to support us and there was absolutely no time for a full-time job, much less a “family”. Furthermore, I took a year off from college before getting married, to work a full time job, so we could save up and make sure I could finish the remaining 2 years of school. I suspect Mr. Jones was not going to college full time and he certainly must have been in some la-di-dah program/curriculum that requires very little time and effort, compared to say, architecture, medical school, engineering, or even music, etc.
I think Ryan Jones needs to take the Art Kulak challenge. Since I'm a long time Metastock customer I'm sure Jeff Gibby can get you in touch with me. I would love to take your money.
While I'm as skeptical as anybody, I can say that I think he means $500 draw down per lot traded. So say the account reaches $35000, his max draw down would be 25 x 500, $12500 for 25 trade size. This also assumes a maximum risk of $100 per trade.
Art, Just How many years have you been Option Trading the varied & numerous strategies? You sound a bit quick
to shooting from the hip. Just for comparison sake: What is your ACTUAL TRUE HISTORIC TRADING TRACK
RECORD? Just so all of us amateurs can put on the magnifying glasses and 3RD DEGREE YOUR REAL RESULTS??? Anyone who's been out in the Real Option Trading World has experienced the School-Of-Hard-Knocks before finally seeing the day of light! I'll Endorse Ryan Jones for I believe his presentation met "The Test of Reasonsbleness". LSM
Now, It's your turn to produce some HARD Numbers of Actual Results!
with you when it comes to the intro BS, throwing around random facts. Who cares if he was the youngest to have a certain publisher publish his books? who cares about having created 1000 strategies? I can create strategies all day long, doesn't say anything about them being profitable or me being able to execute them profitably. Stuff like that makes me very skeptical.
MaKes no sense to me - I risk 1-2% to reduce variance - its a mathematical certainty variance will increase with increased risk unless you can somehow know your strike rate is going to stay totally consistent
Trying hard to understand but it's not making much sense to me. How can me making $60 per week turn into a mil in 5 years?
He said to email support@paydaystocks.com or go to chat support at www.fixedratio.com for further clarification.
Because your scaling in with the number of units/contracts as your account grows. So if you're trying to make $40 per trade, that's per unit. Example you could have on 2 calendars versus a larger account that has on 50 of the same calendars.
Why 40% is less than 10%
The only way this strategy would work is if you have a strategy with an expectancy of $60/week. Easier said than done.
Thanks for the insight. However, there seems to be a contradiction in the explanation. It is stated that this money management system will work with anything, including stocks. Later it is stated that it is impossible to get the compounded returns as shown in the table trading stocks. Also, if one was trading options, the margin requirements for the quantity of options needed to be traded in proportion to the capital on hand would be very dangerous!! Ones broker probably wouldn't allow this sort of trading.
Per differences with stocks vs leveraged instruments, read Ryan's book "The Trading Game" pgs 91-97 for more detailed explanation. That said, the plan presented is for one type of option strategy based on capital requirements and risks. Every strategy would use the same general approach, only with different capital requirements and increase rates to adjust to the risk of that strategy. Further, buying 20 options (if that was the underlying strategy) at $100 per option.
The point of the video is how can exponential grow your account via compounding. Small gains add up
This video if full a fake math and assumptions.
14:48 Foundation for Success "Don't Risk More Than 1%-2% on any trade".
42:14 the goal is to average $60 per week while keeping the drawdown to $500 or less per 1-Unit.
Let's put this in an example, risking 2% on all trades.
2% risk on a $25,000 account size = $500 drawdown, this meets his criteria.
$60/week on the same $25,000 account = 0.24%/week = $28,318.81 or 13.27% annual return if compounded each week. Reasonable return/year.
43:59 He they goes against his rules and suggest that you leverage your account to the max and continue leveraging after each trade, hoping you don't have a loosing trade. He also suggest that you are now making $100/ week not $60.
Takeaway, how to become a millionaire, leverage to the max and never loose on a trade.
MetaStock really needs to screen their guests before they come on.
Thanks for your feedback and for watching.
According to this Ryan Jones should be a billionaire by now. Is he ?
He just surpassed Jeff Bezos last week!
Of course!
What this guy is saying is not possible. There is absolutely no trading method that will give you $60 per week GUARANTEED. In other words, his table showing a growth from 10K to $1M in a few years cannot be true because you will suffer several losses in between, especially when you're trading a lot of contracts. His method is great for competitions, but in this case the luck involved is avoiding a big loss. In practice, everyone will sooner or later suffer losses, and because the number of contracts grows geometrically, the loss will be huge. If you're trading your own money, just rely on a fixed percent maximum (1 to 2%) loss and you'll be fine.
Just another recycling of basic money management concepts we have all heard a thousand times before.
Thanks for a pointless comment.
So, if YOU used it you wouldn't still be looking for the secret sauce. Keep looking!
@@pejoly2 thanks for the tip bud
Faulty math.
Math doesn’t add up
so slow, lost an hour of my life on this
How is it when you flip a coin and you bet $1 when you win you win $2 when you lose you lose 1$ who invented this mathematics? You can only win one or lose 1 it's a 50 50 ratio. Your entire concept surrounding this is wrong because if this is the foundation of your calculation then you don't have one.
I think you missed the whole point
You risk 1R to make 2R