Fixed ratio Money Management

Hi all,

I'm new to forex, I've been trading for 3 weeks on demo account.

I'm now setting up my MM for my real account.

Deposit is 1000 eur.

I'd like you guys to help me implement a Fixed Ratio MM (not fixed fractional).

Could you point me how to chose a Delta and a max loss? What should I look for?

Here is a report from my demo account, if it can help set up my MM.

http://toutatis.be/DetailedStatement...weeks100pc.htm

I know I have taken risks.. trading 1.0 lots for a 5k accounts, that why I need your help to get a real MM.

Regards

Just taking a quick look at your statement, there are a couple of points that I feel need addressing, before anything else.

There are lots of trades where you're overloading your risk with the correlation factor ie you've got the same positions in similar pairs.

If you're long Cable & Fiber you're doubling your exposure to Dollar fluctuations, so pick one and trade your normal lot size (when you've got it worked out) or halve your lot size and trade both. If you check through your statement there are several examples of this.

The other thing that leaps out is this: what IS your strategy? In the image below you've gone from short to long NZDJPY in the space of 13 seconds!!! if I read the statement right.

Put these two factors together and I'd be tempted to say that it might be too early to think about going live. A month really isn't long enough to base risking hard earned money in this arena.

As far as your question is concerned there some stuff in my thread with links to how to work out risk, but in a nutshell keep your risk to a maximum of 1% of your account at all times.

Ok thanks for advices

Positions that doesn't last in time are errors from my part when entering an order, as I'm new to Metatrader.

When you say I should risk 1% of my account, does it mean I should set a stop for a 1% decrease on the pair I'm trading?

This is why you need to demo longer. Errors on demo accounts DON'T cost you money!!! There are lots of things to learn so why pay for mistakes any earlier than you have to?

No in simple terms you would take your 1000 euro account and find 1% of that = 10 euros

So 10 euros is the MOST you risk on any ONE trade, or any group of trades, ie if you wanted to trade two pairs at the same time you split the 10 euros into 5 euro trades on each pair. Without understanding leverage, and picking the right position size to suit your method you will struggle.

If you go to Post# 19 in my 'Helping Newbies' thread (link below) it's explained in more depth, and there are other links to MM stuff.

This might help as well http://www.forexfactory.com/showpost...&postcount=122

No advice about fixed ratio MM?

I'm also looking for the excell spreadsheet about that MM.

I suspect most use %R (constant % of balance) for their trades.

Give the search button a spin

I did use the search, otherwise I wouldn't ask here..

Look for a book by Ryan Jones called The Trading Game. It will give you plenty of advice on fixed ratio.

I read it but it doesn't talk about chosing your delta and lot size. It's kind of obscure book.

Well, the guy invented fixed ratio position sizing. If you don't understand it then it might not be for you. As for determining your delta I think you need some position sizing software. You might want to look at this: http://www.adaptrade.com/fixratio.htm

Best wishes.

I've been looking for such a software for days!! Thanks !