i am learing a lot about money management these days. so i thought that i should start a thread..where we can discuss, disect, analysis some money management techniques. i would like the more experienced traders to guide this thread so that we can learn something about money management. everyone is welcome to post their style of money management.

ok...here is some Fixed-ratio MM as in ryan jones book

start with an account size which is atleast 3 times larger than your expected drawdown. how is a drawdown calcualted?

1. Start with the total number of dollars in your trading account. For example

let's say it's 1000 USD.

2. Now pick how many pips profit you need to achieve before you trade with

more lots. Let's say 200 pips (10 pips/day for 20 trading days in a month

average).

3. Now start trading .1 mini lots (which is profit/loss 1 USD). You would only

increase to .2 lots after gaining 200 pips. When you gain 200 more pips profit

you would trade .3 lots etc...

4. Month 1: $1000 + (200 pips x .1 lot = $200 ) Total: $1200

Month 2: $1200 + (200 pips x .2 lots = $400) Total: $1600

Month 3: $1600 + (200 pips x .3 lots = $600) Total: $2200

Month 4: $2200 + (200 pips x .4 lots = $800) Total: $3000

.

.

.

5. if after the first month your balance falls below $1200 you are back to 1 lot. and so decrease your lot everytime you fall below the previous increment level.

this is the strategy discussed in ryan jones book..in more detail. what are the drawbacks of using this strategy? what do you guys think about this strategy? what other strategies are there which we can use or discuss?

regards

gabroo

ok...here is some Fixed-ratio MM as in ryan jones book

start with an account size which is atleast 3 times larger than your expected drawdown. how is a drawdown calcualted?

1. Start with the total number of dollars in your trading account. For example

let's say it's 1000 USD.

2. Now pick how many pips profit you need to achieve before you trade with

more lots. Let's say 200 pips (10 pips/day for 20 trading days in a month

average).

3. Now start trading .1 mini lots (which is profit/loss 1 USD). You would only

increase to .2 lots after gaining 200 pips. When you gain 200 more pips profit

you would trade .3 lots etc...

4. Month 1: $1000 + (200 pips x .1 lot = $200 ) Total: $1200

Month 2: $1200 + (200 pips x .2 lots = $400) Total: $1600

Month 3: $1600 + (200 pips x .3 lots = $600) Total: $2200

Month 4: $2200 + (200 pips x .4 lots = $800) Total: $3000

.

.

.

5. if after the first month your balance falls below $1200 you are back to 1 lot. and so decrease your lot everytime you fall below the previous increment level.

this is the strategy discussed in ryan jones book..in more detail. what are the drawbacks of using this strategy? what do you guys think about this strategy? what other strategies are there which we can use or discuss?

regards

gabroo

and i grow...pip by pip.......pip by pip!!!!