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Joined Mar 2016
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The proper application of money management gives a forex trader an account growth edge while trading forex without a logical money management strategy typically amounts to little more than gambling.
Hello Friends, Does anyone knows of any Good Money Management / Risk Management Books. Or know any site, where much more information is given on where to put Stop / profit orders, to have further understanding.
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As you may know, the normal genuine range will let you know in PIPS, what the normal unpredictability has been is in the course of the last x time frames... apply a standard deviation of 2 to the ATR and will have a stop misfortune that has been hit 5% of the time in the last x periods.... truly cool huh? This implies, you can be 95% sure that your stop misfortune won't be hit on the off chance that you pick the pattern accurately.
The proper application of money management gives a forex trader an account growth edge while trading forex without a logical money management strategy typically amounts to little more than gambling.
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Take profit and stop loss placement are not about money management. It falls into your trading strategy. It's your strategy and trading style that will decide where to place take profit and stop loss. You can read The Disciplined Trader by Mark Douglas. It will help you to develop your trading psychology. It will help you to be a disciplined trader.
Take profit and stop loss placement are not about money management. It falls into your trading strategy. It's your strategy and trading style that will decide where to place take profit and stop loss.
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FWIW, that's the way I view it also (reasons here). For me, SL/TP/exits are trade management, position sizing is money management. But each to their own.
{quote} I personally like to use a 14 period Average True Range (ATR) with 2 standard deviations to determine my stop loss in conjunction with a pivot point. This has been the MOST effective method I've found. As you may know, the average true range will tell you in PIPS, what the average volatility has been is over the last x periods... apply a standard deviation of 2 to the ATR and will have a stop loss that has been hit 5% of the time in the last x periods.... pretty cool huh? This means, you can be 95% certain that your stop loss will not be...
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TrevA thanks, could you elaborate more please, I'm confused how to read SD applied to ATR, maybe a chart for more clarify?
Tks
