Risk Management

Risk Management and Money Management and lots more is needed to become successful in the Forex Trading, if you wanna become successful in the Forex.

AGGRESSIVE RISK MANAGEMENT CALCULATION
Frankly, i do not know if I am posting at the right place, still a junior member on FF, so i can contribute this by reply.

here we go...i sat down to do excel/spreadsheet Risk management Calculation with a little twist. The idea was to challenge the universal wisdom of 1-2% risk per trade.

What if...you have a strategy of say expectancy of greater than or equal to 50% and above, then ramp up Risk per Trade % to 20% per trade...what would happen?

Well...I will attach here screenshoots and the spreadsheet for your experimentation. Hey, it is not the all, i am quite a novice excel user, this will need improvements, a lot.

Before you judge me, that i am too aggressive and wants people to blow account, see it for yourself first!

PLEASE I WOULD APPRECIATE DETAIL DISCUSSIONS AND IMPROVEMENT TO SEE IF THIS MADNESS CAN WORK!

I'm in.

now do one that shows maximum allowed straight loss at 20% risk.

i've addressed this in the other chat

https://www.forexfactory.com/showthr...6#post11085106

Without taking too much analysis and pressures many new babies are trying to adopt only hardcore risk management process but it is not completely wise. We will require risk management for a comfortable trading journey but we have to be very well known about the fact that various risk management modules have to be adopted after proper analysis. Otherwise wrong adoption of various risk management modules can cut our profits drastrically.

Risk management is the most important yet ignored aspect in trading. I mean all unsuccessful traders do not have any risk management policy. I do not risk more than 1% of my capital in a single trade. If I open more than one trade my maximum risk percentage is 2%.

its okay , admit the importance of , but what actually Money management in Forex trading and RM ? any different between two?

I did make a few more twist to this file, and oh, i want people to improve this file with multiple variations and realistic inventions. See I know you have been brainwashed enough by what you have been reading, universal wisdom, right, of 1-2% per trade. Here, let's empty our cups of what we know and see if this works!

I have started implementing this in my demo trades, it seem to work, I am currently using 5% per trade of demo account of $3,000. About 4 trades running, the very first was a loss, these running 4 are all in profits, still far off targets, I love high xR trades, some of them here are 5R targets with trailing.

PLEASE I NEED CAPABLE PEOPLE TO COME AND TAKE THIS SPREADSHEET AND WORK ON IT, WITH REALISTIC IMPROVEMENTS. IF YOU KNOW SOMEONE THAT IS THAT GOOD INVITE HIM/HER HERE, YOU WILL BENEFIT. THIS MIGHT BE THE MISSING LINK TO YOUR ACCOUNT'S EXPONENTIAL GROWTH!

......STARTED A READ ME, FAR FROM COMPLETE....

README.TXT
RISK MANAGEMENT CALCULATOR SPREADSHEET
RRR - Risk Reward Ration, from now on, I will be using R for reward size, say RRR of Risk 1:2 Reward, i will say 2R.
RISK % PER TRADE - the percentage of capital you want to risk per trade
DEPOSIT CAPITAL - the initial amount of cash you deposited on opening account, we believe you will never have to deposit another, you are here to exponentially grow that amount.
RRR1- This is half the total of position RISK % PER TRADE amount. 0R or 2.2R - Either loss, 0R or half position hits target at 2.2R. This is to quickly get out of risk. At half position hitting target of 2.2R, the other half is risk-free ride. Preservation of capital is our priority. Why 2.2 not 2? 0.2R to take care of swap charges and/or commissions.
RRR2- 0R or xR to Yr; Trail Stop - hoping you ride with your trailing stop style till stop gets hit. Or modify the excel to fill a fixed Target R
TRADE RATE(ESTIMATED) - This depends on your time frame, I use multiple time frames for my trading, Long-term is W1, intermmediate or i prever to call mid-term is D1 and Short-term is H4. This has to do with your trading system not with this risk calculator.
RRR TP1 Mod; Enable? - YES or NO - For every 10 trades the x1 and x6 is set to zero(Loss) to greatly lower win rate and insert minimum of 2 loses per 10 trades. NOTE; Enabling it YES implicitly set/overrides 'Maximum Allowable Straight Wins' to maximum of 4 straight win trades

IMPROVEMENT/SUGGESTIONS:
1. Maximum Allowable Straight Wins - Do not allow more than x numbers of straight wins; if last previous win run is x number, then force loss on the current trade. if you do not want to control this, set the value to Zero - 0. Clue, i guess, is to use the "TP1 WIN COUNT" column and function - SUM(), hmm.
2. WITHDRAWALS; No one will be a full-time professional trader and live off free air, you need cash for your upkeep, so we should implement withdrawals
3. SIMULTANEOUS TRADE; We should take into account, of course randomly, between certain number of trades say 1 - 8 concurrent trades we may be in at a time due to some trades needs days, even weeks, or 2 months to score you that Target profit.

FORMULAE EXPLANATIONS
The Win/Loss Randoming:
CHOOSE(RANDBETWEEN(1,3),$C$5,RANDBETWEEN($D$5,$E$5-1),RANDBETWEEN($D$5,$E$5))
Breakdown:
CHOOSE(RANDBETWEEN(1,3)... - meaning pick 1 or the following 3 items per randomized session. But note this has upped the chances of wins since two of the three variables is a win. I believe you need atlease >=40% expectancy from your strategy to be in good shape.
$C$5 - fixed 0 aka loss as 1st variable to pick
RANDBETWEEN($D$5,$E$5-1) - 2nd variable, chance of win between the lower bound and upper bound reward, but less the upper bound by 1 so it never gets hit in this case, this will greatly reduce final Gain Amount from looking astronomically unrealistic
RANDBETWEEN($D$5,$E$5 - 3rd variable, same as above but this time give the upper bound value a chance
OBSERVATIONS;
1. I certainly think 5-10% risked per trade is very achieveable, now this will depend on your trading edge! Are you a machine gunner or a sniper! I am a swing trader, mostly on Daily Charts and have a particular setup only one that trades off Weekly chart, I rarely take setups of H4. I am a sniper trader, so i think to ramp risk up to 5-10% with decent RRR of greater than or equal to 3R is good for me!
2. TP1; I dropped the defensive TP1, TP2 template where you have two target profit, TP1 @ 1.25R, then Trail TP2. I worked the maths with observations, I realized the option of defence of TP1 is cutting the potential exponential growth of this Moneny Management on Steroids thing...Take that whole loss if you have to, but when you win say 3R, you are whole and golden! Try and tell me too.
3. I realized the more cash you have as startup capital the more your chances of not running aground. Sometimes, drawdown as bad as 60% means nothing when your trading edge start to shine consistently.
4. Emotions; you need nerves of steel to follow this thru you target trade count, I was looking at say 50 trades, then bank have of capital, then restart the madness!

I've been juggling the idea of only trading one side of the market. Be a seller or a buyer only. This method is executed predominantly in equity and futures markets where most traders are buyers only - just by the nature of these markets.

I think this could be applied to FX markets with success as well. My biggest problem is FOMO. I feel the need to buy and sell at particular levels. Some times it comes back to bite me and I can take quite a few stop outs. This could have been avoided if I played only one side.

I've been considering becoming a seller only because most candlestick charts are produced by the bid which is the trigger for sell orders.

Still, I have a feeling that I'm missing out.

choosing sides does not apply to FX. simply because it is based on conversion theory instead of asset value.

I'm not familiar with conversion theory. I'm a purely technical trader.

I'm using 5-10 % of my equity. I've try to use more than 50% and i lose. That was my mistake who want to get more profit.

Undoubtedly safety of funds is our foremost priority while engaging in any kind of investment activities. As forex is a risky business both internal and external factors contributes to the riskiness of this s world market, a trader will require good risk management modules and proper use of these tools to keep his risks lower as possible. A good sign is forex traders are now using various pending orders and trading tools as a part of their risk management process.

learn to trade spreads in futures and options and there are many bi-directional strategies you can try

Trading 2 directions is what I'm trying to avoid.

I've got my trading strategy down. I'm exploring the possibility of limiting my risk by only being a seller or only being a buyer.

whatever market you trade it's always a two-way market. If you trade bi-directionally you can capitalize on that. You can also trade options profitably when the market is flatlining.....

If you trade buy set ups only, you become less risky.

Well that could be true in a bull market, no doubt. If all you did in US equities for the last 8 yrs or so was btfd on every X ,% dip, you'd be in tall cotton.

Hard stops put a huge target on your back...I only use them if i'm going to be away from the computer for awhile which is rare...Any black swan you will likely be toast regardless...One percent risk sounds good on paper but unless you have an account the size of Soros you will never make any money...You may last a long time but you will never make tons of money...and I prefer mental stops and i say when i'm wrong..

Stop buying into all of the bullshit and generic crap you read on the internet from losing traders and start focusing on finding a way to WIN..And doing whatever it takes to WIN

biggest myth in trading is that all you need is more than 50% probability. You need 90% if you want a career at this.

And you should have 90% probability of Break Even, Full Target, and 97% probability of NOT losing your full risk.

Problem is people dont know WHERE there targets are or how to control risk in the trade.