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Compound Money Management

  • #1
  • First Post: Feb 3, 2019 9:15am Feb 3, 2019 9:15am
Re posting this from a site that is no longer active.
Compound Money Management Strategy:


Ok for arguments sake we're starting off with a $1000 trading account with a risk of around 2%
All things being even and to keep it simply we will break the strategy down backwards dividing it by two then play it forwards into small manageable lots.


1/ 25+25-50
2/ 50+50-125*
3/ 125+125-250 / Buys you 10 x $25 to win another 3 consecutive wins

1/ 250-250-600
2/ 500+500-1250
3/ 1250+1250 2500 / Buys you 10 x $250 to win another 3 consecutive wins

===========
2500
5000
10,000
20,000
40,000
80,000
160,000
320,000
640,000
1,280,000
===============
Attached Image (click to enlarge)
Click to Enlarge Name: download (4).png Size: 144 KB


if your confident with the performance of your trading strategy feel free to increase the number of compounds
Attached Image (click to enlarge)
Click to Enlarge Name: download (3).png Size: 159 KB


If you lose start again. You will only ever lose your initial investment ie. = $25.
If you struggle to compound all 3 trades ( and you will ) break it down say to lots of just two. This still has a dramatic effect on the compounding interest rate of your account.
Once you have reach your desired target, simply repeat the last few trades always starting from a lower value meaning you risk less & win more.
DO NOT compound your losing trades - Please do NOT Martingale / DOUBLE YOUR WINNINGS NOT YOUR LOSSES !
Trust me this is easier to write on paper than it is to put into practice. But it works.

Go here for the above strategy https://www.forexfactory.com/showthr...0#post11957790
  • #2
  • Feb 4, 2019 2:43am Feb 4, 2019 2:43am
Hiya, man! How are you?

Thanks for starting this topic! totally love this idea and I've been using your MM method and it worked wonderfully well.

Anyway, may I know why the second compound result is 125 instead of 100? And why 250-250 is 600? Do you mean the RR you are aiming is larger than 1RR?

The one I use is the version where it would buys me 7 x initial risk to win another 3 consecutive wins. A pure 1RR at that, risking the initial risk only (after cost)

Initial risk 10

10 get 10 = 20
20 get 20 = 40
40 get 40 = 80

80 - 10 = 70 / initial risk 10 = 7 chances to try 3 wins again.

On average I get the 3 wins after 2-3 retries. still a great profit at the end of the day.

I have my own twist trying the 2RR and 3RR. It's tough as the deepest hell but the reward is mind blowing.
Simplicity is the key to brilliance
  • #3
  • Edited 5:36am Feb 4, 2019 5:03am | Edited 5:36am
Quoting vdubus
Re posting this from a site that is no longer active. Compound Money Management Strategy: Ok for arguments sake we're starting off with a $1000 trading account with a risk of around 2% All things being even and to keep it simply we will break the strategy down backwards dividing it by two then play it forwards into small manageable lots. 1/ 25+25-50 2/ 50+50-125* 3/ 125+125-250 / Buys you 10 x $25 to win another 3 consecutive wins 1/ 250-250-600 2/ 500+500-1250 3/ 1250+1250 2500 / Buys you 10 x $250 to win another 3 consecutive wins ===========...
So, after winning 25, you double up (earned + 25), after winning 50 you change to earned 75 + 50 instead of 75 + 25 - why is that?
Can you give the original link for that compound strategy?
Thanks!

=======Didn't see the post above=====

  • #4
  • Feb 4, 2019 6:07am Feb 4, 2019 6:07am
Quoting LinFX
Hiya, man! How are you? Thanks for starting this topic! totally love this idea and I've been using your MM method and it worked wonderfully well. Anyway, may I know why the second compound result is 125 instead of 100? And why 250-250 is 600? Do you mean the RR you are aiming is larger than 1RR? The one I use is the version where it would buys me 7 x initial risk to win another 3 consecutive wins. A pure 1RR at that, risking the initial risk only (after cost) Initial risk 10 10 get 10 = 20 20 get 20 = 40 40 get 40 = 80 80 - 10 =...
There are no set rules the reason it's 125 & 1250 is because I break it down backwards from 10k then run it forwards. So for those two trades if you like you would need to extend the profit targets by an extra 50%.
  • #5
  • Feb 4, 2019 6:09am Feb 4, 2019 6:09am
Quoting Go5
{quote} So, after winning 25, you double up (earned + 25), after winning 50 you change to earned 75 + 50 instead of 75 + 25 - why is that? Can you give the original link for that compound strategy? Thanks! =======Didn't see the post above=====
The original copy was for binary options it was my post my strategy.
  • #6
  • Feb 9, 2019 6:30am Feb 9, 2019 6:30am
this is the risk reward tool I use... it's pretty awesome

https://www.investsoft.eu/risk-reward-ratio-tool.html

Inserted Video
  • #7
  • Feb 28, 2019 8:15am Feb 28, 2019 8:15am
Quoting vdubus
this is the risk reward tool I use... it's pretty awesome https://www.investsoft.eu/risk-reward-ratio-tool.html https://youtu.be/VNIxdVYslDM
Although I calculate my risk reward ratio manually; but thanks for your link; let me check first.
  • #8
  • Mar 18, 2019 1:30pm Mar 18, 2019 1:30pm
You need a strategy with 50%+ win rate for this or any other compound MM system to make money. Assuming your r:r is 1:1 of course. On top of that, you will make/loose exactly the same amount long term if you use compound MM or not. IT DOESN'T give you an edge! It only creates an illusion of greater gains, because when you win, you win a large amount and when you lose, you lose a small amount.
  • #9
  • Mar 18, 2019 2:32pm Mar 18, 2019 2:32pm
Quoting Simo894
You need a strategy with 50%+ win rate for this or any other compound MM system to make money. Assuming your r:r is 1:1 of course. On top of that, you will make/loose exactly the same amount long term if you use compound MM or not. IT DOESN'T give you an edge! It only creates an illusion of greater gains, because when you win, you win a large amount and when you lose, you lose a small amount.
I don't really know how to answer this. I've been trading this strategy a long time there is no illusion rather than a traders lack of ability to follow the strategy through.
As for needing a 50%+ win rate on a 1 to 1 RW well that just common sense. No strategy on those terms would be profitable ? The ability to win larger gain than when you lose, well thats all trading is ?
  • #10
  • Mar 18, 2019 6:13pm Mar 18, 2019 6:13pm
Quoting vdubus
{quote} As for needing a 50%+ win rate on a 1 to 1 RW well that just common sense. No strategy on those terms would be profitable ? The ability to win larger gain than when you lose, well thats all trading is ?
Then you understand that the compound MM system does not increase the amount of money you will make over a long period of time. If it did, you wouldn't need a 50%+ win rate on 1 to 1 RW strategy to make money with this MM system.

If you have a 50%+ win rate on 1 to 1 RW strategy, you will make the same amount over a long period of time regardless if you use this MM system or not. Smart MM doesn't increase the win rate of your strategy, it only increases the chances that you will survive a long period of losing trades, it reduces DD.
  • #11
  • Mar 18, 2019 7:53pm Mar 18, 2019 7:53pm
Quoting Simo894
{quote} Then you understand that the compound MM system does not increase the amount of money you will make over a long period of time. If it did, you wouldn't need a 50%+ win rate on 1 to 1 RW strategy to make money with this MM system. If you have a 50%+ win rate on 1 to 1 RW strategy, you will make the same amount over a long period of time regardless if you use this MM system or not. Smart MM doesn't increase the win rate of your strategy, it only increases the chances that you will survive a long period of losing trades, it reduces DD.
Im going to have to agree to disagree basically because your are wrong. It's a state of mind more so than a strategy. Anyway don't settle for a 50% strategy unless you have at least a 3/1 rw. Trade on a 1/1 rw I compound personally my entries x2 and have an 80%- 90% performance. Im not here to prove or sell anything Im just sharing a break down of my own personal strategy.
https://www.forexfactory.com/showthread.php?t=877950
https://www.forexfactory.com/showthread.php?t=877044
https://www.forexfactory.com/showthr...69#post9221169
,,,enjoy :/
  • #12
  • Mar 19, 2019 2:20pm Mar 19, 2019 2:20pm
Quoting vdubus
{quote} Im going to have to agree to disagree basically because your are wrong. It's a state of mind more so than a strategy. Anyway don't settle for a 50% strategy unless you have at least a 3/1 rw. Trade on a 1/1 rw I compound personally my entries x2 and have an 80%- 90% performance. Im not here to prove or sell anything Im just sharing a break down of my own personal strategy. https://www.forexfactory.com/showthread.php?t=877950 https://www.forexfactory.com/showthread.php?t=877044 https://www.forexfactory.com/showthr...69#post9221169...
I'm not trying to be a dick or anything and very much appreciate what you're doing.

I've tried calculating how much you earn with two-step compound MM system relative to normal trading with a win rate of 60% and rw 1:1. Ended up getting multiple results that depend on how I approach it. So, I don't exactly know what effect the system has.
  • #13
  • Mar 26, 2019 10:58am Mar 26, 2019 10:58am
Quoting GeorgeBaile
{quote} Although I calculate my risk reward ratio manually; but thanks for your link; let me check first.
Yes, you can simply calculate risk reward ratio manually or using standard mt4 fibo tool but there you have all necessary calculations like risk, lot size based on risk, stop loss and take profit values in account currency.
  • #14
  • Mar 28, 2019 4:49am Mar 28, 2019 4:49am
Quoting Gruffydd
{quote} Yes, you can simply calculate risk reward ratio manually or using standard mt4 fibo tool but there you have all necessary calculations like risk, lot size based on risk, stop loss and take profit values in account currency.
Exactly; and I see a number of traders try to calculate the risk reward ratio manually. Thanks for your words.
  • #15
  • Apr 7, 2019 5:52am Apr 7, 2019 5:52am
there is anyone who can make sure more about money management ? there is any different between money and risk management ?
  • #16
  • Apr 7, 2019 6:56am Apr 7, 2019 6:56am
Quoting Simo894
{quote} I'm not trying to be a dick or anything and very much appreciate what you're doing. I've tried calculating how much you earn with two-step compound MM system relative to normal trading with a win rate of 60% and rw 1:1. Ended up getting multiple results that depend on how I approach it. So, I don't exactly know what effect the system has.
There are several ways to implement the strategy Either one trade at a time or a consecutive run
Attached Image (click to enlarge)
Click to Enlarge Name: 5db13c2f-c302-4a86-99bd-49a5ccf2fd19.jpeg Size: 68 KB


I am trying to get an EA built as to set out these levels automatically so watch this space

to set it out manually simply stack pending order scripts on top of each other
Attached File(s)
File Type: ex4 DROP_PENDING_BUY.ex4   5 KB | 555 downloads
File Type: mq4 DROP_PENDING_BUY.mq4   2 KB | 542 downloads
File Type: ex4 DROP_PENDING_SELL.ex4   5 KB | 518 downloads
File Type: mq4 DROP_PENDING_SELL.mq4   2 KB | 561 downloads
  • #17
  • Sep 1, 2019 2:41am Sep 1, 2019 2:41am
Quoting NathanAstel
there is anyone who can make sure more about money management ? there is any different between money and risk management ?
in order to me, its all about, there is no major different between two.
  • #18
  • Oct 16, 2019 3:56pm Oct 16, 2019 3:56pm
A good MM is what I need. I will study this on an excel sheet.
Thanks for sharing.
  • #19
  • Oct 27, 2019 10:58am Oct 27, 2019 10:58am
Quoting xpace
A good MM is what I need. I will study this on an excel sheet. Thanks for sharing.
The basic rule is; don’t go for more than 2% on per trade position. And don’t make over trade!
  • #20
  • Feb 10, 2020 12:27am Feb 10, 2020 12:27am
Quoting vdubus
{quote} There are several ways to implement the strategy Either one trade at a time or a consecutive run {image} I am trying to get an EA built as to set out these levels automatically so watch this space to set it out manually simply stack pending order scripts on top of each other {file} {file} {file} {file}
I tried installing and I can't get them to work.. Can you share a video on how to get working please
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