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Money Management - the art of the exit

  • #41
  • Dec 21, 2010 10:17pm Dec 21, 2010 10:17pm
Quoting justme2005
dear all,

thanks for FF coz i can post this.

i'm 25th yr old. i was hv xperiance for 3 years in stok n forex trading.
may be this is not the 1st time happen to me, but the situation now make me very2 not like b4. i always lost for more than 6 month . lost in trading and lost all my client. and now i lost my confidence. i was heared all the old says, but no one can make differend or can change . i'm still looser n almost lost my posision in work, but i was lost all in my life my the important things is i lost all my money too. n know i'm just...
hey buddy, no worries, im still 19. I have experienced bad times in trading, as a matter of fact, its inherent in this business. Loosing is like the price you pay for experience.

I hope you things will turn positive for you.
  • #42
  • Dec 21, 2010 10:17pm Dec 21, 2010 10:17pm
Quoting hayseed
//---

some of our russian friends seem to feel otherwise.....h

//----

http://championship.mql5.com/2010/en/news/14

//----

http://championship.mql5.com/2010/en/news/18
H, thanks for the links.

I was amused by this quote: "You know, in the Championship, in 99% of cases the most aggressive and risky models of MM are used, otherwise it's almost impossible to win."

In other words, horses for courses.

If I may speak on behalf of all of the folk that you've helped throughout the year, by spending many hours tirelessly coding their EA/indy requests, a BIG BIG THANK YOU.

I'm sure they'd all join me in wishing you a very happy holiday season and a safe and prosperous 2011.

All the best,
David
  • #43
  • Dec 21, 2010 11:00pm Dec 21, 2010 11:00pm
Quoting hanover
....
If I may speak on behalf of all of the folk that you've helped throughout the year, by spending many hours tirelessly coding their EA/indy requests, a BIG BIG THANK YOU.
I'm sure they'd all join me in wishing you a very happy holiday season and a safe and prosperous 2011.
...
your post for Sir hayseed applies to u & to all other programmers too.
Happy holidays all
  • #44
  • Dec 21, 2010 11:35pm Dec 21, 2010 11:35pm
Quoting nubcake
absolutely incorrect assessment.
.
ok............h
to trade and code, keep both simple... no call to impress....h
  • #45
  • Dec 21, 2010 11:42pm Dec 21, 2010 11:42pm
Quoting hayseed
ok............h
goddamn man. you suck at arguing.

at least call me names or something *bored*
Congratulations ScalaFX for coming out of the closet!
  • #46
  • Dec 21, 2010 11:45pm Dec 21, 2010 11:45pm
Quoting nubcake
goddamn man. you suck at arguing.
ok............h
to trade and code, keep both simple... no call to impress....h
  • #47
  • Dec 23, 2010 6:25am Dec 23, 2010 6:25am
does anyone have any variations of MM strategy where it lets them successful (most of the time) ride the trend?

my current idea.....got from a trading system here at FF

-open 2 lots, and set TP for one lot at 50 and the other at 100; SL for both are 100 pips
-when one trade reaches 50 TP, one trade will exit
-then I will set the 2nd trade's stop loss to breakeven
-the remaining trade will reach 100 pips
  • #48
  • Edited 8:05am Dec 23, 2010 7:55am | Edited 8:05am
Quoting wguan
does anyone have any variations of MM strategy where it lets them successful (most of the time) ride the trend?

my current idea.....got from a trading system here at FF

-open 2 lots, and set TP for one lot at 50 and the other at 100; SL for both are 100 pips
-when one trade reaches 50 TP, one trade will exit
-then I will set the 2nd trade's stop loss to breakeven
-the remaining trade will reach 100 pips
If you are placing a TP for both you are not riding the trend, you are limiting your trade by placing Take profits, if the trend runs you have missed it.
  • #49
  • Dec 23, 2010 10:08am Dec 23, 2010 10:08am
Quoting wguan
Anyone uses expert advisors? how do you manage your trades with them.

I have been backtesting a OzFX_MethodV2 for a while and the backtest is just not working,

I would ultimately want to bring some EA to live trading, but how do you go about personally determining whether an EA works? Forward testing? or backtesting?

And how do members of FF use backtest, how do they analyze the results?

Currently my way of doing it is to whip out an EA that has a interesting system and test it with different money management inputs. I want to have it profitable...

I think we will be taking your money.....(insert maniacal laughter here)
  • #50
  • Dec 23, 2010 8:19pm Dec 23, 2010 8:19pm
Quoting tradestar1
I think we will be taking your money.....(insert maniacal laughter here)
haha, i don't think so,

i actually am reflecting on my idea of using and EA. I think they will rather assist me in terms of entry but in terms of exit, i feel that i will have an money management EA to and myself to handle that....

as for my previous post, i figure a trailing stop will be a better solution instead of a TP
  • #51
  • Dec 26, 2010 11:15pm Dec 26, 2010 11:15pm
which method of position sizing do you prefer, fixed position size, or fixed fractional, and why.
  • #52
  • Edited 2:27am Dec 27, 2010 2:06am | Edited 2:27am
If you do automated trading i think it will be always difficult to find the right exit strategy, because the EA donīt "know" anything about priceaction, S/R Levels or RN and so on.
The big advatage of EAīs is that the donīt have emotions like fear or greed, and minimized your screentime.

My first rule for exit is: Never let a winner run to a loser, so if the market is in my direction and P/R-ratio is 1:1 (profit and SL have the same size), iīll close halve position and have a free trade with enough space for the trade to breath.
When the move is strong enough, i only go BE.
But all this decisions i can only do by watching the market not with automated trading.

Maybe you can use a part of this exitstrategy for your EA.

Sorry for my bad english.
Trade well and many pips to all. Martin
  • #53
  • Dec 27, 2010 3:10am Dec 27, 2010 3:10am
fixed position size is good for newbies and help to grow profit and limit the loss
  • #54
  • Dec 29, 2010 4:35am Dec 29, 2010 4:35am
Quoting eurotrash
Entry is the most important because even with very tight MM, if price always immediately moves against your entry, you'll die the death of a thousand cuts. If your entry is such that price always immediately moves in your favour after entry, then you'll always have a chance to remove risk and let some winners run.
Also, your exit may let you hold on to a winner, but your entry determines whether there will be a winner to hold on to.
That's what's called an entry with edge and that's a little bit rare to find

Regards,

Nader
  • #55
  • Dec 29, 2010 5:17am Dec 29, 2010 5:17am
Quoting wguan
does anyone have any variations of MM strategy where it lets them successful (most of the time) ride the trend?

my current idea.....got from a trading system here at FF

-open 2 lots, and set TP for one lot at 50 and the other at 100; SL for both are 100 pips
-when one trade reaches 50 TP, one trade will exit
-then I will set the 2nd trade's stop loss to breakeven
-the remaining trade will reach 100 pips
As mentioned repeatedly, you need an edge. Otherwise, you can assume that the probability for moving in both directions is equal. Even if [under that assumption] your 50 pip TP will be hit more often, the double -100 pip from your SL will kill you. You can use random walk theory to prove that.
And then transaction costs (e.g. spreads, commissions, your time, etc.) will tip the scale against you.

You need an edge.

Good luck and Happy New Year!
  • #56
  • Dec 29, 2010 5:31am Dec 29, 2010 5:31am
What do you mean by
Quoting tradestar1
a continuation trade of Fridays price
?
How do you know whether to buy or sell Friday afternoon?
  • #57
  • Dec 29, 2010 5:47am Dec 29, 2010 5:47am
Quoting nubcake
absolutely incorrect assessment.

there was ABSOLUTELY NOTHING in any of that which i read that suggests MM has anything to do with edge.
In fact, I have to agree. If we are talking about MM as being the position sizing determination technique, then surely it has nothing to do with the edge. The edge is actually determined before and MM is then applied next. The application of a specific MM technique does not have any effect whatsoever of the edge of a trading system or methodology.

If we go back to gambling and gaming again as a reference, this is equivalent to saying that bet size can change or have an effect on the odds!!!! Absolutely untrue!!!

Best Regards,

Nader
  • #58
  • Jan 2, 2011 1:56am Jan 2, 2011 1:56am
^.^ thank you so much for your contribution. exit is just if not more important than entries for those who want a set profit.
  • #59
  • Jan 2, 2011 10:16am Jan 2, 2011 10:16am
Quoting 6pack
What do you mean by ?
How do you know whether to buy or sell Friday afternoon?
Your kidding right?
  • #60
  • Edited Jun 12, 2014 2:52am Jan 2, 2011 10:32am | Edited Jun 12, 2014 2:52am
Here is an article from Ed Seykota regarding risk.
RISK MANAGEMENT

And here is a little fixed fractional position sizing calculator for you to play with.

In the calculator the enter High would be your entry price, Enter low would be the price you want to place your stop.

Enter the balance size of your account.

Enter the % of balance you want to risk, it is currently set at 1%.
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