if youre shorting something from 4 dollars to 1 dollar then that is 75 percent but if you first short from 4 to 2 dollars that is 50 and then from 2 to 1 dollars that is another 50 percent, totalling 100 percent?
so should you periodically take profit and then enter your short in again so the percentages are bigger?? or am i just retarded??
anyone able to explain this??
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You just broke the mathematics, congratz!
kek
you get 3 dolla either way
It's 100% of less.
That only works when you trade with leverage.
if you compound everytime then yes, the more trades you do from 4 to 1 dollars, the more you gain
Wot
Read thread title as "shorting meth" at first. Now I'm disappointed.
so then it's good to just get in and out of your short position as many times as possible??? I guess like you should do it then every time the percentage is more than the transaction fee?
teorethically yes, but in practice you need to account fees and that all your trades have to be in profit
>good to just get in and out of your short position as many times as possible
yeah, basically this. in and out as much as possible, work every high and every dip
You could look at it another way... if you short something that currently sells for $4, you have a maximum potential profit of $4 per, but only if the stock collapses down to zero. However, your risk is unlimited because there is theoretically no limit on how high a stock can go.
This is why shorting isn't always the brightest move; and why shorting with either leverage or margin is a fools move.
If you don't believe me, just ask this guy.
oh god please throw your self in front of a mower
ok.. so are you guys bullshitting me or for real?? This seems counter intuitive. So essentially scalping is more profitable than swing trading?
>shorting with either leverage or margin is a fools move
well yeah i mean you shouldn't expose your whole portfolio to that kind of risk but if youre playing with like 1-5 percent of your holdings then it's ok.. there are a lot of traders that have "made it" this way i dont want to have that argument though
This only work if you use leverage.
you dont have to get all smug?
if it's dumb then why cant you elegantly explain it? Im admitting i think my logic is flawed. Or is it?
Quickest way to make money is day trade options
Quickest way to lose money is to day trade options
Take out earnings reinvest entire thing
Can make big money
Can lose everything
Completely out of control once you hit buy; your only other decision is when to hit sell
>scalping is more profitable
now you're getting there
Kek only if you make more trades, its called compoune wins.
But make sure you dont lose right? You are going to take the gamblers path.
But there are a lot more traders who have been wiped by this. It's like any other "money making" idea, like real estate, storage lockers, collectible plates, or FOREX.. people see the ones who get rich doing it, and they think "ya, I can do that too". They then jump in and get shellacked.
This is especially true in Crypto, where unregulated exchanges give anyone who shows up access to leverage. Users play with their liquidation number like it's a protection for them, when in fact it's just the way the exchanges used to fleece investors and steal all their shekels.
Not gambling
>mfw abusing financial tools for personal gain
hey guise i get that trading isn't for everyone and im just learning or whatever but i think that everyone has a right to gamble if they want to and the government shouldn't stop them because that is not freedom and also just because a casino takes money from fools that doesnt make them evil.. that money wouldve been wasted anyways and the game is fair with all the rules upfront
BUT this wasn't supposed to be a thread about whether trading is profitable (overall) or ethical.
I just want to know if this math thing is right? And if it's actually more profitable?
No, the math isn't right. You can't add the percentages like that because the denominator changes. See Zeno's Paradox of the Tortoise and Achilles:
platonicrealms.com
you already got the answer didn't you?
4*0.75 = 3
(4*0.5) + (2*0.5) = 3
ok I'm not kidding now, no it's not more profitable! when you open a new position or double down on the existing one you just expose yourselves to unnecessary risk, considering the stock already lost half its value how do you know it's going to zero?
yeah but if you put 100 dollars on the trade the first time from 4 to 2 you get 150 dollars back and then if you do it a second time from 2 to 1 you get 150 again?? or you could even put the 150 on the trade the second time and get 225 back!?!?!
meanwhile if you just put the 100 from 4 to 1 you get only 175!?!?!?!??!?
is it because in the compounding situations.. ie trade twice from 4 to 1.. you actually are incurring more risk as well?
I'm not sure if you've now turned to bait or if you are just this bad at math.
why stop at 100 and 150? you can place a bet of 200 dollars, 250 or even a thousand dollars any time. you'll burn with that risk management
well i didn't sleep last night so excuse me if it's obvious
well lets say you only have 100 dollars.. then pulling your money in and out of shorts maximizes potential?