If you haven't already seen my replies at https://www.forexfactory.com/thread/...4#post14762344, after a long time spent in research and simulation, along with many breakthroughs, I believe I have cracked the code for the optimal money management in trading. I think it's time to create a separate thread about it and have made it all into a very accessible and user-friendly tool. Introducing TheJustCalculator.com
Imagine you have a good trading strategy, either in backtesting or live trading, for example, a strategy with a win rate of 50% and an average risk-reward ratio of 2. But if you don't have any idea how to manage your capital or risk, should you risk 0.5%, 1%, or 2% per trade? What about drawdowns? What if you lost 6 times in a row? How do you recover from losses? Or if you won 6 times in a row and made a profit, how much should you withdraw? I've created the perfect trading tool to guide you in these scenarios. The most important factor is having a consistently profitable trading strategy, and the calculator will handle the money management for you.
First, go to https://thejustcalculator.com/, take a quick look at the site description and guide, and then return to the calculator. Begin by clicking on the gear icon on the corner right to set up the calculator.
In this example, I set up a forex configuration where one lot equals 100,000 units, the fee is 3.5 USD per lot, and I included settings for maximum leverage, maximum order, minimum order, and order digit. For the maximum drawdown (Max DD) and the maximum risk, this is where you can customize them; for now, just leave them blank. Then click "Apply Settings."
Now, for the main UI of the calculator, imagine you have a spare $10k and you want to trade with it. Obviously, you won't invest it all in the broker. Based on my research, the best approach at the start is to deposit 20% with the broker as our capital and leave 80% in the bank. This is what you will input into the calculator: $2000 for capital and $8000 for the bank, along with our winning rate and average risk-reward ratio. Now, imagine you've found a theoretical potential trade in EURUSD with an entry price of 1.08105 and your stop loss at 1.07960. Input all that and click "Calculate Size."
Here, the calculator will indicate how much to buy or sell in lots and at what minimum leverage. It will suggest you BUY 0.61 LOT, risking 4.71% of the capital, which is $2000. However, in total value, this represents 0.93%, meaning in the case of a loss, it could potentially be $93.06, not including slippage. The calculator also takes into account the fees, with the total fee amounting to 4.96%. Therefore, from the $93.06, the total fees for both entry and exit would be $4.76.
But we're not finished yet. If you scroll down, you'll see sections for "Outcome" and "Calculate Withdrawal." Here, you need to input either your capital balance after closing the trade or the trade's P&L after closing. Let's assume the trade was successful and you made a 2x profit. Enter $200 in the Profit/Loss field, so the new capital will be $2200. Then click "Calculate Withdrawal."
The calculator will also suggest how much to withdraw after a winning trade, accompanied by some encouraging messages. It suggests withdrawing $89.60 of the profit, which means that from your initial winning trades, you can withdraw and enjoy your earnings on real-life things. Just make sure to record that withdrawal in the Bank section, and the calculator will take it into account. The calculator also summarizes all the trade information and provides a CSV text, which you can copy into your personal trading log for easy logging. Once that is done, you click "next," and the calculator updates the capital and balance to the current values.
That is generally how the calculator is used. You can test various inputs, different winning rates, and risk-reward ratios. You can also view simulations that synchronize with the calculator's inputs, like this one.
The calculator is developed entirely in JavaScript, allowing you to download it, review the code and use it offline use. However, if you're interested in delving deeper into the theory behind it, I recommend reading my paper titled "Beyond the Kelly Criterion." In it, I detail all of my research and the steps that led to my final discovery, as well as how I incorporated all of that into the calculator.
https://zenodo.org/records/10681498
It's been a long journey filled with numerous discoveries and theories, and I'm quite satisfied with the results of my findings. I've done my best to make the calculator as user-friendly as possible for traders, including features like the small window version and local storage to keep inputs stored in the browser. I hope the tool will prove useful and beneficial to many traders, both new and experienced. If you have any questions or feedback, please feel free to ask.
Best regards,
Justus L. Ludovic
Imagine you have a good trading strategy, either in backtesting or live trading, for example, a strategy with a win rate of 50% and an average risk-reward ratio of 2. But if you don't have any idea how to manage your capital or risk, should you risk 0.5%, 1%, or 2% per trade? What about drawdowns? What if you lost 6 times in a row? How do you recover from losses? Or if you won 6 times in a row and made a profit, how much should you withdraw? I've created the perfect trading tool to guide you in these scenarios. The most important factor is having a consistently profitable trading strategy, and the calculator will handle the money management for you.
First, go to https://thejustcalculator.com/, take a quick look at the site description and guide, and then return to the calculator. Begin by clicking on the gear icon on the corner right to set up the calculator.
In this example, I set up a forex configuration where one lot equals 100,000 units, the fee is 3.5 USD per lot, and I included settings for maximum leverage, maximum order, minimum order, and order digit. For the maximum drawdown (Max DD) and the maximum risk, this is where you can customize them; for now, just leave them blank. Then click "Apply Settings."
Now, for the main UI of the calculator, imagine you have a spare $10k and you want to trade with it. Obviously, you won't invest it all in the broker. Based on my research, the best approach at the start is to deposit 20% with the broker as our capital and leave 80% in the bank. This is what you will input into the calculator: $2000 for capital and $8000 for the bank, along with our winning rate and average risk-reward ratio. Now, imagine you've found a theoretical potential trade in EURUSD with an entry price of 1.08105 and your stop loss at 1.07960. Input all that and click "Calculate Size."
Here, the calculator will indicate how much to buy or sell in lots and at what minimum leverage. It will suggest you BUY 0.61 LOT, risking 4.71% of the capital, which is $2000. However, in total value, this represents 0.93%, meaning in the case of a loss, it could potentially be $93.06, not including slippage. The calculator also takes into account the fees, with the total fee amounting to 4.96%. Therefore, from the $93.06, the total fees for both entry and exit would be $4.76.
But we're not finished yet. If you scroll down, you'll see sections for "Outcome" and "Calculate Withdrawal." Here, you need to input either your capital balance after closing the trade or the trade's P&L after closing. Let's assume the trade was successful and you made a 2x profit. Enter $200 in the Profit/Loss field, so the new capital will be $2200. Then click "Calculate Withdrawal."
The calculator will also suggest how much to withdraw after a winning trade, accompanied by some encouraging messages. It suggests withdrawing $89.60 of the profit, which means that from your initial winning trades, you can withdraw and enjoy your earnings on real-life things. Just make sure to record that withdrawal in the Bank section, and the calculator will take it into account. The calculator also summarizes all the trade information and provides a CSV text, which you can copy into your personal trading log for easy logging. Once that is done, you click "next," and the calculator updates the capital and balance to the current values.
That is generally how the calculator is used. You can test various inputs, different winning rates, and risk-reward ratios. You can also view simulations that synchronize with the calculator's inputs, like this one.
The calculator is developed entirely in JavaScript, allowing you to download it, review the code and use it offline use. However, if you're interested in delving deeper into the theory behind it, I recommend reading my paper titled "Beyond the Kelly Criterion." In it, I detail all of my research and the steps that led to my final discovery, as well as how I incorporated all of that into the calculator.
https://zenodo.org/records/10681498
It's been a long journey filled with numerous discoveries and theories, and I'm quite satisfied with the results of my findings. I've done my best to make the calculator as user-friendly as possible for traders, including features like the small window version and local storage to keep inputs stored in the browser. I hope the tool will prove useful and beneficial to many traders, both new and experienced. If you have any questions or feedback, please feel free to ask.
Best regards,
Justus L. Ludovic
Justus L. Ludovic