I have a question about money management:
When you enter a trade do you enter using one or more positions (all positions togehter amounts to the X% that you want to risk)?
Here is one thought that I'm having illustrated with an example:
Buy: 100,00
S/L: 50
Risk: 2%
Account: $10.000 (pipvalue = $1)
Lotsize (1 position)= 10.000*0,02/(50*1) = 4 Minilots
Lotsize (4 positons)= 10.000*0,02/(50*1*4) = 1 Minilots
R:R = 1:1 <-> TP (1 pos) = 50 pips
OR: TP (4 pos) = 4 levels: TP1 = 12, TP2 = 25, TP3 = 37, TP = 50
After each TP is hit, move remaining S/L to (old S/L - TP.hit), which means that if TP1 and TP2 hit, then the S/L for pos3 and pos4 would be 99,75.
Say the price doesn't reach our TP (1 pos) - that means we lose the 2% investment. Say the price only reached 100,30 (ignoring the spread), that means that the 4pos would give us: +12, +25, -25, -25 = -13pips. This means that we end up loosing 13/200*2% = 0,13%.
If TP (1pos) would have hit then that would have been 2% gain. But with the 4 pos: 12+25+37+50 = 124, 124/200*2 = 1,24% gain, which gives R:R 1:1,6.
My question again: How does your position look like when you enter a trade? (Hope that you can understand, I'm looking for the best tradeoff between risk and reward, how do you do it?)
When you enter a trade do you enter using one or more positions (all positions togehter amounts to the X% that you want to risk)?
Here is one thought that I'm having illustrated with an example:
Buy: 100,00
S/L: 50
Risk: 2%
Account: $10.000 (pipvalue = $1)
Lotsize (1 position)= 10.000*0,02/(50*1) = 4 Minilots
Lotsize (4 positons)= 10.000*0,02/(50*1*4) = 1 Minilots
R:R = 1:1 <-> TP (1 pos) = 50 pips
OR: TP (4 pos) = 4 levels: TP1 = 12, TP2 = 25, TP3 = 37, TP = 50
After each TP is hit, move remaining S/L to (old S/L - TP.hit), which means that if TP1 and TP2 hit, then the S/L for pos3 and pos4 would be 99,75.
Say the price doesn't reach our TP (1 pos) - that means we lose the 2% investment. Say the price only reached 100,30 (ignoring the spread), that means that the 4pos would give us: +12, +25, -25, -25 = -13pips. This means that we end up loosing 13/200*2% = 0,13%.
If TP (1pos) would have hit then that would have been 2% gain. But with the 4 pos: 12+25+37+50 = 124, 124/200*2 = 1,24% gain, which gives R:R 1:1,6.
My question again: How does your position look like when you enter a trade? (Hope that you can understand, I'm looking for the best tradeoff between risk and reward, how do you do it?)
