Consistent monthly profit with 50% risk | Forex Factory

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Consistent monthly profit with 50% risk

  • #1
  • First Post: Feb 3, 2020 5:25am Feb 3, 2020 5:25am
Hello traders..
Here i'm gonna share my money management and all ears to all advice. This MM works with my strategy and i think it will works on yours too. I start backtesting from August 2018 until Desember 2019 then start a demo account on January 2020. i want to start using real account but one thing bothering me is the 50% maximum potential loss i can't get rid of.

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This is the result i got, one thing i like about this money management is i feel like im running a local business without any stress and fear like normal trading sessions i used to do. the problem here is the loss is too much for a month. lets say i start with $100 every month, i will collect the profit or add some dollars to make it $100 again. if you have any thoughts or advices, let me know.

Road to trading for a living
  • #2
  • Feb 3, 2020 5:47am Feb 3, 2020 5:47am
Nice work GearZero - - The 50% have you looked at the charts to understand why its a loss of 50% like news affected Brexit?
  • #3
  • Feb 4, 2020 1:52am Feb 4, 2020 1:52am
Quoting theunkown
Nice work GearZero - - The 50% have you looked at the charts to understand why its a loss of 50% like news affected Brexit?
I have. i started to trade on week after NFP news released. most of the losses were because of NFP reversal movement especially when the chart became sideway first. Look, its not like $50 loss is that much, i could trade with $1000 and the loss is just 5%/month. My point is, the loss is way too much than the profit i got.
imagine i got 10% average for 5 month and all gone in 1 month of loss, what if i loss 2 month in a row? my capital is only about 25% now.

im trying to decrease the loss percentage, even though i just got onedigit%/month.
  • #4
  • Edited 9:19pm Feb 5, 2020 9:04pm | Edited 9:19pm
After implementing on HOW A LOCAL BUSINESS MONEY MANAGEMENT WORKS, i found a way to get more profit and minimum loss each month. The idea is i trade 5 pairs with the same capital on each pair, this is like having 5 Shops in local business.
In a month we get profit from each pair or each shop with risk management IF i loss on a shop, the profit from other shops will cover it.
Again, with this money management, I feel like Im running a local business without any stress and fear like normal trading sessions i used to do. The table below is what i got from backtesting and demo account started in Januari 2020.
Attached Image (click to enlarge)
Click to Enlarge Name: ROI.png Size: 22 KB


if you have any thoughts or advices, please let me know.

Road to trading for a living
  • #5
  • Feb 5, 2020 9:13pm Feb 5, 2020 9:13pm
Hi
i would say this always look at wins and losses in percentage terms cause the money you make is essentially immaterial to how you manage money. Percentages tell you the real risk regardless of whether you are trading $10 or 1 million, keep percentages small and you will always make money, cause you are then managing the risk.
simon
  • #6
  • Feb 6, 2020 2:28am Feb 6, 2020 2:28am
Quoting doingthere
Hi i would say this always look at wins and losses in percentage terms cause the money you make is essentially immaterial to how you manage money. Percentages tell you the real risk regardless of whether you are trading $10 or 1 million, keep percentages small and you will always make money, cause you are then managing the risk. simon
Finally somebody who understans how to manage risk!
It's better to be out wishing to be in... than to be in wishing to be out!
  • #7
  • Feb 7, 2020 7:51pm Feb 7, 2020 7:51pm
Quoting doingthere
Hi i would say this always look at wins and losses in percentage terms cause the money you make is essentially immaterial to how you manage money. Percentages tell you the real risk regardless of whether you are trading $10 or 1 million, keep percentages small and you will always make money, cause you are then managing the risk. simon
Thankyou. and yes, i calculate it in percentage to make it more realistic to everyone.

I realize that 50% loss in a month is too much for traders. i tried to reduce the loss percentage and somehow it reduced the profit either.
this chart below is how it goes after i implemented a new Money Management with the same strategy.
Attached Image (click to enlarge)
Click to Enlarge Name: ROI.png Size: 23 KB


What do you think? if you have any thoughts or advices, let me know.

ROAD TO TRADING FOR A LIVING
  • #8
  • Feb 8, 2020 12:12am Feb 8, 2020 12:12am
Hi
I would try this take the system you have crafted and work out how many trades per month you are making and then work out what percentage risk per trade are you risking. If its more than a 2 to 3% in either direction per trade then, you need a new system cause this metric will tell you if your system is viable or not.
Hope this helps.

I am not a pro trader (by choice I might add) but I have been trading in FX since 2007 so this amount of time teaches you a lot if you pay attention. Risk is the most important thing you can get right in trading, all the other stuff is not important if risk is not controlled and maintained at a manageable level.

Simon
  • #9
  • Feb 9, 2020 1:32am Feb 9, 2020 1:32am
Quoting doingthere
Hi I would try this take the system you have crafted and work out how many trades per month you are making and then work out what percentage risk per trade are you risking. If its more than a 2 to 3% in either direction per trade then, you need a new system cause this metric will tell you if your system is viable or not. Hope this helps.
Talking about the strategy I use with the MM, it has only about 50% win rates calculated by winning pips / losing pips. i don't trade everyday and only open around 1 - 6 orders in a month with Take Profit from 1 pip - 200+ pips / order depend on price actions. the risk per trade is 100 pips / order which is 10% loss potential with 50% loss maximum. I Know it is too high for a risk but THAT is why I'm here looking for a better management.

50% win rates calculated by pips but in a long run I got 14 out of 18 month ended in profit. I don't think I will create a new system because of high risk, but i will try to improve the MM to decrease the risk as low as posibble.

If you have any thread or books or whatever about risk management, let me know.
I will try to trade again tomorrow Feb, 10 and update the result here.

Thanks Simon, i hope you can find a good managemet when you try this.
I will also share the strategy on how I place the orders.

Road to Trading For A Living
  • #10
  • Feb 9, 2020 1:44am Feb 9, 2020 1:44am
Hmmm I cant risk that amount. I am just not comfortable doing that, but each to their own, and I am not criticising anyone for it, as different people different levels of risk. if you want to know my strategy I am documenting it in my journal, its taken me 12 years to feel confident enough to speak about it, anyway its there if you want to read it.

https://www.forexfactory.com/showthread.php?t=979067

My win rate is approximately running at 70% roughly about the same as you and from what I have learned over time anything much higher than this usually has huge downside risk attached to it, however I do tend to cut my losers quickly, and try and pump up my account size by doing this.

Books, websites etc, I like all traders have read "trading in the zone" it is a good book but what really changed for me was when I decided in 2011 to develop a proper plan and get serious once you do this your MM comes into sharp focus.

Simon
  • #12
  • Feb 12, 2020 3:10am Feb 12, 2020 3:10am
This month trading session has ended in 3 days for 5% Profit only in USD/JPY.
With this kind of strategy, patience, and good business mindset & management, All traders can get consistent profit.

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After 3 month consistency, i will share my investor account, so we can learn each other for better trades.

ROAD TO TRADING FOR A LIVING
  • #13
  • Feb 13, 2020 12:51am Feb 13, 2020 12:51am
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Another Trading opportunity in another shop, with this month expected profit of 4%. If there are many good movements, the profit will be more than that.
we will see it soon.

Road to Trading for A Living
  • #14
  • Feb 17, 2020 12:21am Feb 17, 2020 12:21am
Another Shop waiting to touch the profit. My expected profit of this pair is 18% but it looks like i will get 11% in this month.
That is absolutely okay.

Attached Image (click to enlarge)
Click to Enlarge Name: cT_cs_3559210_XAUUSD_2020-02-17_13-19-19.png Size: 47 KB


ROAD TO TRADING FOR A LIVING
  • #15
  • Feb 17, 2020 7:10pm Feb 17, 2020 7:10pm
We doing good at Gold with 11.3% profit this month, AWESOME.
now there are two pairs remaining, GU & GJ. For GBPJPY, this month my expected profit is 2%. But, it could be more because the market looks good to trade.
Let's see what happen this week.

Attached Image (click to enlarge)
Click to Enlarge Name: cT_cs_3559210_GBPJPY_2020-02-18_08-07-20.png Size: 44 KB


ROAD TO TRADING FOR A LIVING
  • #16
  • Last Post: Feb 20, 2020 2:02am Feb 20, 2020 2:02am
February trading period has ended. the trades went well, we got profit from 4 trading pairs and a loss in GBPJPY, but that is okay because the loss is covered by profit from other pairs. a 50% loss? quite high right? anyway we got 3% overall profit. AWESOME!!

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See you in the next trading periode, March, 9 2020

ROAD TO TRADING FOR A LIVING
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