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  1. #1
    Veteran Member Ammeo's Avatar

    How to Deal with Large Sums of Money? !!!

    With a $10,000 to a $100,000 almost everyone knows how to deal with it. But what if some has half a million or a million dollars to invest, where should he/she put it? How many different asset classes or investment areas he should look into?
    Also, what time frames he should use- should he go long term just like the hedge fund and other portfolio managers do? should he be only looking into the daily and weekly charts and have proper analysis and research on the asset before opening a position in it?
    Does Scalping or short term trading ends at this stage?
    Last edited by Ammeo; 02-28-2013 at 01:58 PM.

  2. #2
    Specialist Member RCox's Avatar
    Dollar amount makes no difference. Everything is percentages and risk to reward ratios. You don't get into more trades just because you are dealing with more money.

  3. #3
    Specialist Member marvel's Avatar
    Big funds are trading mostly on daily and weekly time frames. They are using global macro strategies which help them to take trades for several weeks or months.

  4. #4
    Moderator Kolyo's Avatar
    There are differences in my opinion, at least from psychological point of view. If you are dealing with large capital (>10 million $) you will want to minimize risks as the effect of bad decisions will be much bigger and also you will be satisfied with small percentage gains as they will be big enough in dollar terms. One element which is very often used by hedge funds or larger traders is diversification of the account among different assets and/or different strategies. You could allocate part of the capital to one trader, other part to other and thus having several strategies working together. If one of them suffers during particular period of time, the others will recoup its losses. For traders which attempt to scalp with position of 1 to 10 even 50 millions of dollars there will be no problems as now the liquidity in the markets is very good, but for larger funds in the range of 100 millions to several billions USD I think there will be no scalping opportunities. This is true only if these funds attempt to trade big positions, but if they exploit high frequency algorithms and place thousands of trades per day they could use scalping strategies without problems. I know there are at least few billion dollar funds which use such high frequency scalping strategies successfully.

  5. #5
    Active Member rockettrader's Avatar
    Unfortunately now is almost impossible to trade binary options with very large sums. The liquidity in this new market is very thin, but I hope in the future there will be more players and more liquidity providers and even this options will become part of the strategies of the big hedge funds!

  6. #6
    Senior Member Grae's Avatar
    If you can trade a $1000 dollars and make profits, you can trade $1,000,000 too. The strategies should not change. Neither should the discipline. But diversification to more instruments would be a good idea.

  7. #7
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    The best thing is diversification. If this is all ur money (and not PAMM or similar thing) then u should consider investing in more than 1 place. I dun agree that $1000 & $1,000,000 doesnt make difference. We have a post here on BOTS forum about Top five factors which affect our trading outcome. Most or I think all users said that "Emotional control" is necessary. It means if u r dealing with 1000 there will be less stress, less fear of loss and less emotional involvement as compared to dealing with $1 million.
    Even if we ignore these things (by saying that we have EA or any other signal service type thing where there is no emotion), IMHO diversification is much better when u r dealing with large sums of money.

  8. #8
    Veteran Member Ammeo's Avatar
    Quote Originally Posted by Grae View Post
    If you can trade a $1000 dollars and make profits, you can trade $1,000,000 too. The strategies should not change. Neither should the discipline. But diversification to more instruments would be a good idea.
    Yes diversification would be the best solution. If i had such big amount i would have put it in 10 different places like PAMM accounts, hedge funds, Real estate, bonds, maybe high dividend yielding blue chips, precious metals etc...

  9. #9
    Legendry Member willyw's Avatar
    Trading $1,000 and $1,000,000 do make a difference. Bigger accounts have better flexibilty in trading in terms of holding power if you dont over trade and have proper risk management and not greedy will will make big bucks. If you have such a big account, you can consider using the pyramid averaging strategy to trade.

  10. #10
    Senior Member Grae's Avatar
    Quote Originally Posted by M.J View Post
    The best thing is diversification. If this is all ur money (and not PAMM or similar thing) then u should consider investing in more than 1 place. I dun agree that $1000 & $1,000,000 doesnt make difference. We have a post here on BOTS forum about Top five factors which affect our trading outcome. Most or I think all users said that "Emotional control" is necessary. It means if u r dealing with 1000 there will be less stress, less fear of loss and less emotional involvement as compared to dealing with $1 million.
    Even if we ignore these things (by saying that we have EA or any other signal service type thing where there is no emotion), IMHO diversification is much better when u r dealing with large sums of money.
    If you are dealing with larger figures, the stress is less. For one you can break down your money into smaller chunks (the best way to go), and as long as you can make good returns from each, you are good. For smaller monies, the stress of loosing is larger.

    In my opinion, as long as you can master trading in small sums, then more power to you.

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