One Big Trade vs Multiple Trades, Which Is Better?

[Hamza2424]

There are two kinds of traders. Which one would you rather be, and why do you think that style of trading is better than the other?

Person 1: Places only 2 trades per month and risks all of his capital on just 1 or 2 trades because he believes that, by finding the perfect opportunity, he can make the same amount of money that someone else might make by placing multiple trades in a month. He believes it is better to take a big risk only once or twice rather than risk money on multiple trades. He also thinks that people who trade more often are not skilled traders, and are just trying again and again until they hit the jackpot like gamblers.

Person 2: Places multiple trades in a month. He has the same capital as Person 1, but he have more setups. Let's say he places 10 to 25 trades per month. He believes it is better to spread risk across multiple trades rather than risking everything at once. He thinks that if he wins 10 trades out of 20, he could still end up profitable.

Which person would you rather be, and why? Please give your own reasons, not the ones already mentioned above. Share from your personal experience.

[taufik123]

About what type of trading will be used and suitable for me, maybe I will consider the Coins to be traded.
For example, trading with Bitcoin is more of an investment or a mid term or long-term trade because Bitcoin's performance will be better in the long term.
Option 1 is also an option to do Swing trading, enter with one big trade at the right support point and exit at the right price, so that it can make a big profit.

As for altcoins, maybe the second option will be the choice, but I think 10 - 25 transactions per month is still quite few,
the second option should be fast trading by taking advantage of fluctuations and volume of coins to make more profits, scalping precisely continuously to make bigger profits.

To minimize the risk of losses when the market cannot be predicted, all options must have a reserve money allocation to buy back at a low price.

[JeffBrad12]

It truly depends on the outcome if we are talking about trading. You can create few grands from one trade if you execute it properly, but that kind of opportunity is rare or you can be trading daily getting smaller profit but multiple times in a day and still make good enough gain.
What matters is the profit. Do whatever suits you. I personally am never that kind of person who get fixated with one trading style. I adapt with the market.

[GreatArkansas]

(....)
Which person would you rather be, and why? Please give your own reasons, not the ones already mentioned above. Share from your personal experience.

It seems this comparison is not important because both people in the example have pros and cons, and nothing is wrong.
But just to answer you, OP, since you asked for personal experience and your own reasons. I'll go with Person 1, because I am more likely to be Person 1. Since I am a busy person, I also have other sources of income, including my full-time job, trading for me is just an extra source of income, plus when I am trading like person 1, I tend to zoom out my chart and use higher time frames.

[Oshosondy]

There are swing traders that do not use all their money to trade. Some traders will hold some coins while some traders will use few coins to trade.

You are only talking about swing traders versus day traders.

Swing trading is better than day trading. They use lower risks to trade with low leverage, unlike day traders that are always feeling like they have to earn money from day trading daily.

But if you can day trde with patience, it can be good also.

[Zaguru12]

There are swing traders that do not use all their money to trade. Some traders will hold some coins while some traders will use few coins to trade.

You are only talking about swing traders versus day traders.

Swing trading is better than day trading. They use lower risks to trade with low leverage, unlike day traders that are always feeling like they have to earn money from day trading daily.

But if you can day trde with patience, it can be good also.

I think this would have been a debate between a swing traders and a day trader, but the details of that first trader which is more like a swing trader is definitely more risky because good or smart swing traders do not actually go through this huge risk of using their entire capital for two or more trades because there is high possibility that both trades could end at loss. Also the profit target for the trade should be what the set up actually looks like (R:R) and not the trader setting that.

But in terms of risk it depends on how knowledgeable or how good of an analyst the two traders are, the lesser number of trades doesn’t mean less risk nor the higher number of traders also doesn’t mean all can not end in loss if it is done wrongly.

[programmer3666]

Personally, without a shred of doubt I will go with Person 2. Because spreading your risk across multiple trades is safer than putting everything into one big trade. One mistake in a big trade can wipe out your whole capital. But this into account in real time, If Person 1 uses all his money on one trade and it goes wrong, that is an automatic game over. No second chances. But Person 2 can lose some trades and still recover. Like if he makes 20 trades, loses 10 and wins 10, he can still end up in profit depending on his strategy the was used. It’s just like business, would you invest all your money into one idea or spread it across different ones? Spreading it gives you more chances to succeed. So in my view, consistency and risk management!! Person 2 is the better approach than going all in and hoping for one big win.

[Oshosondy]

But in terms of risk it depends on how knowledgeable or how good of an analyst the two traders are, the lesser number of trades doesn’t mean less risk nor the higher number of traders also doesn’t mean all can not end in loss if it is done wrongly.

Yes, this is true. But in real life, day traders are the ones that are losing most. The mentality that they have that they can make money daily with high leverage will teach them lessons. Some of them will not want to use high leverage but that impatience is there and they will later see themselves using the high leverage.

But swing traders that think of closing the position or trade after a week or few weeks does not have the impatience that day traders have. I am not just posting on this forum, but I am posting from experience.

[Zaguru12]

Yes, this is true. But in real life, day traders are the ones that are losing most. The mentality that they have that they can make money daily with high leverage will teach them lessons. Some of them will not want to use high leverage but that impatience is there and they will later see themselves using the high leverage.

But swing traders that think of closing the position or trade after a week or few weeks does not have the impatience that day traders have. I am not just posting on this forum, but I am posting from experience.

Absolutely, it is someone that has actually gone through series of trades that will definitely be able to spot out the fact that daily traders are usually very risky traders in fact it is those who are actually using high leverage that have made many people to actually think that trading is gambling and if you look at it, many daily traders are actually gambling not trading anything.

For a swing trader with low leverage you will see that even if the market is fluctuating the trader will be in the market for such a long period of time until the trade even goes to his TP. But a day trader who is eager to actually close his trade in a day will set high leverage and could get stopped out easily during the market fluctuations. And this is why you see many traders easily complaining that after they got stopped out the trade went in their direction.

The only thing I was adding is that for success regardless of the type of trader you’re, good analysis is the way to been successful, even if a less knowledgeable person decides to be a swing trader today it doesn’t gurantee his success

[Strongkored]

Which person would you rather be, and why? Please give your own reasons, not the ones already mentioned above. Share from your personal experience.

Number 1 suits me better, because it won't take up much time because I only need to monitor a few coins and open a position and wait for the price to up.
Number 2 may reduce the risk but it could be that the trader only makes a draw, because the profit obtained is reduced due to losses in other positions.
Both have their pluses and minuses and should be done based on the trader's capabilities.

[Catenaccio]

There are two kinds of traders. Which one would you rather be, and why do you think that style of trading is better than the other?

Person 1: Places only 2 trades per month and risks all of his capital on just 1 or 2 trades because he believes that, by finding the perfect opportunity

Person 2: Places multiple trades in a month. He has the same capital as Person 1, but he have more setups. Let's say he places 10 to 25 trades per month.

Which person would you rather be, and why? Please give your own reasons, not the ones already mentioned above. Share from your personal experience.

Traders should only use small part of their capital for trading, so even the big trade in your example should only be small in his total capital including the trading capital part.

There is no such perfect opportunity for trading, as there is always risk but traders should only open a trading position if it is a safe opportunity with kind of acceptable low risk while chance of getting profit is good enough. I see the first trader is better while the second trader is worse because he tries to open more trading positions that in my opinion is not spreading and reducing risk but likely increasing risk.

[ZAINmalik75]

Which person would you rather be, and why? Please give your own reasons, not the ones already mentioned above. Share from your personal experience.

One thing is for sure, person 1 is not going to suffer a lot because he will wait for one or two perfect entries, which we all know seem perfect when we enter but after we hit the buy button, they start to dump 
But recovers later, of course.

Person 1 is not going to suffer a lot because he will use all of his capital at once, so he is saving himself from the trouble of facing different market sentiments and emotional pressure by taking fewer traders and whether he makes a profit or loses, he has to find peace with the result so he will chill after placing 1 or 2 trades. While a person will be taking a lot of trades, facing all that pressure continuously over and over again.

I like to be person 2 but if I am making a profit only. Placing 10 to 25 trades a month seems like nothing because I am sure some traders are placing more than that in a week. I am not talking about scalpers.

[348Judah]

When we are trading, we must have a specific target to what we wanted and also know the strategy to use in order to get the best of it, why I may not be able to support a single and big trade at a glance is the risk of losing on it, because when we invested much to trade and later around go in loss, the painful that will would have taken the decision of splitting it on multiple trades, so many will not want to risk trading at once or because they wanted to just go by such strategy, but to the more safe, we need to apply some effective risk control measure like spreading our trades on multiple attempts.

[Shadiq]

I would prefer to be the second person. In the case of the first person, the possibility of losing all the capital is the highest, since we are limited to only 1 or 2 trades, so we have no chance to make mistakes. If you make even one mistake, you may lose all the capital. Humans are all wrong, you have to take care of that too. In this strategy, you either win or you lose everything.

But even after losing to the second person, there will be a chance to come back and stop if necessary. Even if you make a mistake, you will still have a chance to correct it. In a trade where if you lose you will lose all the capital, if you trade more than once a month, you will have a chance to lose. It is never possible to maintain a record of winning trades %100.

[Smartprofit]

I remember Dariloff (a very experienced trader) expressing a very sensible thought on our forum in 2019: "To get rich and live comfortably, you only need to make two or three successful trades (in your entire life)."

I basically agree with him. It couldn't have been better said. I've remembered his words forever. In my opinion, 10-26 trades per month is too much. For example, if you compare this trading strategy to one that involves making just one or two trades per month, it's less profitable, if only because of the higher commissions.

Ask yourself: "Why bother making 26 trades per month?" If you're able to find profitable trades, then one or two successful trades per month will steadily increase your capital. And compound interest will make you rich.

If you're unable to find profitable trades at all, then 26 trades per month will ruin you.  Besides, what's easier: finding one profitable trade or 26 profitable trades? The answer, in my opinion, is obvious. 🧑‍🎓

[Kelvinid]

As much as possible, I would really aim like how a second person trade. Multiple trades, though quite complicated and require more time and developed skills, but the chances of crashing your asset will also be limited. Putting all your eggs in a single basket is more risky than spreading out the risk across assets, which could gain better opportunities to land in profits.

However, placing one or two trades create focus on developing a solid strategy, but the risk could be higher especially if that coin or asset dips or crash along the way. So I prefer to stick with the second trader instead.

[Muba20]

Considering the overall aspect of the two types of traders, I will definitely follow the trading style of Person 2. He has accepted multi-trades. There is some logic in accepting this. If I put all my money in one or two trades, then that money will definitely be at risk. In this case, a price decline can consume all my money. But when I put my money in different trades, even if my profit or loss is less, it will help me survive in trading. So I think putting all my money in one or two trades is like gambling.

One or two trades are never guaranteed to make profit. That is why the more you trade, the more chances there are. A suggestion is given that not all eggs are put in the same basket, so instead of putting all the trades in the same place, I think it is profitable to keep them in different trades. Although some people see overtrading as a reason for losses, I think overtrading will at least reduce the amount of losses rather than taking profits through one or two trades.

[Dr.Bitcoin_Strange]

I'm a day trader (although I don't trade every day and not also all the time), I prefer to take at least 1-3 trades per day but that's if my strategy shows up and give me an entry, otherwise I will just stay away for that day waiting for the next day to see if I can get an entry as well. If I'm really chanced to trade durring some months, I don't take less than 10 trades. The reason why do that is because I believe if I keep compounding my profit, it's possible I can also make the same profit like someone who took only 1 or 2 successful trade in a month. But what I do know is that it's only swing traders that takes only 1 or 2 solid trades in a month, they are very patient to wait for a perfect opportunity that should be successful.

[Findingnemo]

There are two kinds of traders. Which one would you rather be, and why do you think that style of trading is better than the other?

Person 1: Places only 2 trades per month and risks all of his capital on just 1 or 2 trades because he believes that, by finding the perfect opportunity, he can make the same amount of money that someone else might make by placing multiple trades in a month. He believes it is better to take a big risk only once or twice rather than risk money on multiple trades. He also thinks that people who trade more often are not skilled traders, and are just trying again and again until they hit the jackpot like gamblers.

Person 2: Places multiple trades in a month. He has the same capital as Person 1, but he have more setups. Let's say he places 10 to 25 trades per month. He believes it is better to spread risk across multiple trades rather than risking everything at once. He thinks that if he wins 10 trades out of 20, he could still end up profitable.

Which person would you rather be, and why? Please give your own reasons, not the ones already mentioned above. Share from your personal experience.

Person 2 is likely to have less risky trades than the person 1. I am okay with just one or two trades per month but using their entire trading capital over one is too risky and if can go wither way means they have 50/50 chance here. But with diversification on 10 or 20 trades the user can execute the strategies well. Even if some of their trades ends up in loss still they can float with the profits from other ones.

[Faisal2202]

I remember Dariloff (a very experienced trader) expressing a very sensible thought on our forum in 2019: "To get rich and live comfortably, you only need to make two or three successful trades (in your entire life)."

If you're unable to find profitable trades at all, then 26 trades per month will ruin you.  Besides, what's easier: finding one profitable trade or 26 profitable trades? The answer, in my opinion, is obvious. 🧑‍🎓

In our entire life? Now that is something I would not believe. How can we make such trades? Although I have seen some people talking about this too, I thought they were just kidding or trying to look cool by saying something out of the box, because no one usually gives such suggestions that we should trade only two or three times in our entire life and that those trades should be perfect.

What if our two or three perfect trades turn into losing ones? Of course, we would not stop. But if the idea is to stop after one or two trades, if we are Person 1, then that makes sense and will save us from extra trouble. But I am one of those who are impatient, and I would take trades in the same month to win back the losses.