I have been a trader for many years and I have learned much. The most difficult and important thing I learned was that you must have a solid money management strategy if you expect to earn a solid living trading Forex, Stocks, Futures, Crypto's or whatever.
The most important thing is to align your money management program you your personality. To use an oft used baseball analogy, are you a singles hitter or a home run hitter?
Personally, I swing for the fences. This means lots of losses. Most aspiring traders are not comfortable will a very low hit rate. In my opinion and based on my experience with other trader, this is the case.
My entries come on a 15 Minute chart generally. I use a Stop Loss based on the ATR (Average True Range) of the entry chart. Very often I am stopped out and sometimes very quickly.
If the trade takes off, I will sell 1/2 of my position into strength. Most of the time it is better than 1:1 RR on the first half. I then move the stop to a pip or 2 better than break even and there it sits. It is never touched again.
So how do I manage for HR's? Once the final Stop Loss is in place, I move to my main chart which in my case right now is the 4 Hour. I put a 10 EMA on the chart and I do not close until I get a close under the EMA on longs or over the EMA on shorts.
I was drawn to this sort of money management from studying Kristjan Kullamägi. This young man traded a meger $10,000 account to over $100,000,000. That is not typo. It's One Hundred Million US Dollars!
I encourage anyone interested in Home Run Trading to study this guy. He is amazing.
The most important thing is to align your money management program you your personality. To use an oft used baseball analogy, are you a singles hitter or a home run hitter?
Personally, I swing for the fences. This means lots of losses. Most aspiring traders are not comfortable will a very low hit rate. In my opinion and based on my experience with other trader, this is the case.
My entries come on a 15 Minute chart generally. I use a Stop Loss based on the ATR (Average True Range) of the entry chart. Very often I am stopped out and sometimes very quickly.
If the trade takes off, I will sell 1/2 of my position into strength. Most of the time it is better than 1:1 RR on the first half. I then move the stop to a pip or 2 better than break even and there it sits. It is never touched again.
So how do I manage for HR's? Once the final Stop Loss is in place, I move to my main chart which in my case right now is the 4 Hour. I put a 10 EMA on the chart and I do not close until I get a close under the EMA on longs or over the EMA on shorts.
I was drawn to this sort of money management from studying Kristjan Kullamägi. This young man traded a meger $10,000 account to over $100,000,000. That is not typo. It's One Hundred Million US Dollars!
I encourage anyone interested in Home Run Trading to study this guy. He is amazing.
Attached Image (click to enlarge)
