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http://beta.aalf.org/wiki/index.php?title=FreedDrake814&action=history Revision history for this page on the wiki en MediaWiki 1.13.3 Mon, 02 Nov 2026 06:36:26 GMT http://beta.aalf.org/wiki/index.php?title=FreedDrake814&diff=52682&oldid=prev <p>New page: Possibly the most important aspect to get right in trading is survival. This is number one. Without surviving the bad times we are gone, with no hope. Money management and risk may sound l...</p> <p><b>New page</b></p><div>Possibly the most important aspect to get right in trading is survival. This is number one. Without surviving the bad times we are gone, with no hope. Money management and risk may sound like boring subjects, but read on to see how exciting they can be once you learn the concrete reasons and logic for their use. You may never trade the same way again!<br /> <br /> The move looks so good we overstay our welcome by a few minutes as it rallies back a full point in [http://askwhat.net/search.php?query=to+risk+or+not+to+risk+on+commodity+future+option&amp;page=commodityfutureoption commodity future option]. We panic out giving up this full point. For even a good trader, this is sometimes a normal train of events . We gave up 2 1/4 points of a four-point move, thus, we pulled out roughly 45% of the total move.<br /> <br /> [http://askwhat.net/search.php?query=to+risk+or+not+to+risk+on+commodity+future+option&amp;page=commodityfutureoption Commodity future option] pros do not have the luxury of blowing out their accounts like someone who has a day job and trades for a hobby. It's like playing poker and having the advantage of the most chips at the table. Probability smiles on those who can hang in there the longest to let the odds swing their way. Those who are under-capitalized, thus in for a short spell, (risk a lot on each trade) have to be &quot;lucky&quot; to catch a run before their chips disappear. That's why we need to have a method that attempts to identify, &quot;high probability, low risk&quot; trades. Remember this phrase: &quot;high probability, low risk trades&quot; you have less commodity account money to trade with than you desire, you can also gain this &quot;deep pockets&quot; edge by reducing your trading size. Most commodity futures and options traders could easily reduce their normal position size by one-half and instantly become better traders. Reduced pressure and survivability are only two of many reasons to trade smaller.<br /> <br /> As future is essentially a bet between a buyer and seller about what the future market value of the commodity will be. Some futures may be settled in cash with no physical delivery but this is not always the case. With futures there is always the very real concern that a hapless speculator unable to find a buyer may actually have to take delivery of 15000 frozen pork bellies and 2000 barrels of North Sea crude.<br /> <br /> If price needs to go a long way to make you wrong, then this is not a low risk set up, now is it? Once you determine this distance, then and only then can you decide on how many future contracts or options to buy. If your money management parameters say to risk $1000, and the distance to prove you wrong is $500 a contract, then that means you can hold only two futures contracts. That's it. Many commodity futures traders do this backwards by saying they want to buy ten futures contracts - now where do they put their stop to risk only $1000? The stop will probably be too close and it will be like giving money away. It's just another form of over-trading. The commodity market doesn't care how much money you want to risk. The only concern for you is at what point are you wrong and that's the point you want to throw in the towel for your predetermined loss.<br /> <br /> There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.<br /> <br /> A few more things to help you...Read over and over these forty trading rules to make them second nature to your trading philosophy. Find my entire series of commodity trading articles on the web and read them - there's going to be several hundred out there eventually. There's more good stuff on my website including the commodity trading course...all free. Good Trading! There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.!</div> Fri, 13 Apr 2012 12:53:02 GMT FreedDrake814 http://beta.aalf.org/wiki/index.php?title=Talk:FreedDrake814