Money management - page 6
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In forex trading have good money management will be very beneficial for us because we will survive in the forex therefore, we must exercise good money management that will allow us to trade with the maximum. Forex risk is so high that to be successful we must have a good money management
good money management will show how much our ability to manage capital well, so we will be able to survive in the forex trading. Trading to have good money management will make us able to trade properly so that it will benefit us
Management of money affects our trading, therefore we need to have good money management that will allow us to trade with the maximum. With little capital then we will be able to train a good money management
Now I have tried to always use good money management that will allow us to survive in the forex. Forex is a business that has a very high risk that we have to be clever in managing trading capital well to survive in forex
I think by sticking to 10 pips each trades is a wrong move, when market give you a lot you should take those, and when they dont give u at all u need to accept as well. Some day market just simply horrible and you will force to trade simply bcs u need 10 pips
Good money management is very important for traders because with have good money management so that will make us survive in forex. For that, we need to have good money management regardless of our trading capital. for that, we need to practice good money management in a demo account
I am a bit confused about money management.
money management in trading means (in my conception) using all posibilities at hand to diminish even by a fraction the risks involved in trading.
because doing trading as a retailer, is extremily risky because we do not have at our disposal the endles resources as the banks have for example. one is trading and accepts the huge risks that comes with it, but at same time is able to act in a way to reduces these risks by a fraction.
here are some of the actions money management can incorporate to reduce risk exposure (only some I can think right at this very moment, there are alot more)
-leverage. the lower the leverage the lower the risks
-lot size per position (can it be fix lot, %of account or whatever you think might work for your strategy, it is generally accepted that a position should be no more than 1-2% of the account, I go for 4% at this very moment bz I use very low leverage, but it is my intention to get to 1%)
-TakeProfit, this depends on strategy, your is to take 10pips every position, TP can have alot of strategy, like filter with an different indicator, reverse of the signal, trailing and so much more; I personaly use an ROI (return on investment) strategy, where a position that fills an certain % of the used margin to open it, it will be closed
-StopLoss, same speech as above, one can set it in pips, in % and so much more. the strategy and hundreds of hours of backtesting will say which is better to diminish risk per position
But what is important, the money management is not something external able to save a strategy, trading strategy and money management they are all part of one. It is all included in one strategy
Risk depends on your initial stop loss, lot size, and the value of the symbol. It does not depend on margin and leverage. No SL means you have infinite risk (on leveraged symbols). Never risk more than a small percentage of your trading funds, certainly less than 2% per trade, 6% total.
You place the stop where it needs to be — where the reason for the trade is no longer valid. E.g. trading a support bounce, the stop goes below the support.
AccountBalance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the spread, and DeltaPerLot is usually around $10/PIP, but it takes account of the exchange rates of the pair vs. your account currency.)
Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
MODE_TICKVALUE is not reliable on non-fx instruments with many brokers - MQL4 programming forum (2017)
Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum (2018)
Lot value calculation off by a factor of 100 - MQL5 programming forum (2019)
You must normalize lots properly and check against min and max.
You must also check Free Margin to avoid stop out
For MT5, see 'Money Fixed Risk' - MQL5 Code Base (2017)
Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5 or 0.1 Lots maximum.
Risk depends on your initial stop loss, lot size, and the value of the symbol. It does not depend on margin and leverage.
OMG, are you real? wiliam roeder which comment i have been reading from years, would never state a sentence like that. the main risk of an retailer account is leverage. i would need to go back to basics to ilustrate an example here, but do I need to? wrong leverage is the first thing that will burn an unexperienced trader account. common, do I need to explain this simple fact?