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Money Management

  • #21
  • Jul 25, 2017 4:23pm Jul 25, 2017 4:23pm
Quoting NeilWagner
Money management means using low risk reward ratio in every single position! Since, there is no guarantee in Forex pro traders using MM policies so seriously! In my trading, I take only 1% risk ratio in my per trade position, that is money management to me.
1% is more appropriate to any trading concept for avoiding loss with certainly. As a scalper what percent risk is sustainable? any idea you have ?
  • #22
  • Jul 25, 2017 4:35pm Jul 25, 2017 4:35pm
Mine is to risk 2% of my capital per trade. When I use to day trade I would do 1%. Never risk more than that IMO. I don't like increasing or decreasing position size based on performance. I try to keep things consistent.
  • #23
  • Jul 25, 2017 5:10pm Jul 25, 2017 5:10pm
Just to pitch in, I only risk about 1% per trade. My stop loss is much wider though. I rarely hit a stop loss since I only use it as an emergency measure. Typically, I'll manually exit a bad trade at about 0.5 to 1% loss, before it gets out of hand. My other rule is I never trade more than 1/2 my margin. That's it for me. Kind of simple really.
  • #24
  • Jul 25, 2017 8:04pm Jul 25, 2017 8:04pm
for every 1000 dollar in your account, only trade a maximum of 0.05 standard lot.

you can have a maximum of 3 open trades with this sizes at the most. also keep a good risk to reward ratio in your trades.
  • #25
  • Jul 25, 2017 9:05pm Jul 25, 2017 9:05pm
We all know that Forex is all about your strategy and management of your risk with money. I have always taken 2% risk not more than it for my investment because handling the difficult situation in market is not easy.
  • #26
  • Jul 26, 2017 7:12pm Jul 26, 2017 7:12pm
Blind leading the Blind is what is happening on this thread. Money Management has NOTHING to do with how much % you risk on a trade. That is RISK MANAGEMENT portion of your trading plan.

RISK MANAGEMENT:

  1. Define Risk - there are MANY types of risks traders face. Get the facts! Document how you will precisely deal with each risk
  2. Drawdown - Max Drawdown, consecutive loss, account volatility etc
  3. Infrastructure Risk - Connectivity, platform, etc
  4. Risk to capital safety - broker risk, negative balance, Flash Crash etc
  5. Risk Exposure - if you don't know what your account exposure is, stop trading !
  6. Event Risk - Tsunami, Korean Peninsula, terrorist attack etc
  7. Geo-Political Risk - Elections, Brexit etc
  8. CB intervention, G20, IMF related risk


MONEY MANAGEMENT:

  1. Well, Let's see if someone really takes the time to help others. Without a documented MM as part of your trading plan, there is no strategy to trade. You are shooting darts on a wall with the assumption that the entire wall is your Bulls Eye !

Staying in my lane...
  • #27
  • Jul 26, 2017 11:52pm Jul 26, 2017 11:52pm
Along with money management, risk management is also required to be learn in the Forex, in order to survive in Forex Trading.
  • #28
  • Jul 30, 2017 10:53am Jul 30, 2017 10:53am
Quoting FXtrader22
Hey traders! I was wondering what are some of your favorite money management methods. I read many books and they say how important money management is, more important than actual entries... Though I tried martingale, lost thousands doing that, I don't really like the increasing risk when you are losing methods...... But I also heard something called position sizing, like increasing your lots as you win, like add on lots as the trend goes? Things like that are interesting thanks guys!

Exponencial https://en.wikipedia.org/wiki/Exponential_growth (https://en.wikipedia.org/wiki/Exponential_growth)
In good trading series (6 - 12 months) i will make 20 times of account and in bad i will loose deposit, thats all.
Its only one of the MM that can work in long term, because time to time Black swan will arrive and most of the linear MM traders will loose most of their money.
My blog: forex-scalping.com | Exponencial money management is the key!
  • #29
  • Aug 10, 2017 6:02pm Aug 10, 2017 6:02pm
Managing the money is a great skill than others in Forex trading, we always looking for good trading knowledge but practically in spite of having most powerful trading knowledge that’s not possible to make sure a healthy trading life if you don’t know how to manage money.
  • #30
  • Last Post: Aug 10, 2017 9:33pm Aug 10, 2017 9:33pm
Money management depends on your investment and your levels of skills. I have never taken more risk with my money so it is quite a mini ratio for me to get the profit.
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