My point of view for money management

Stevenfx

Trader
Oct 30, 2011
20
0
17
I have a clear protocol for money management, which I follow without asking questions. Any trader needs some kind of money management system that he can follow blindly, because we cannot take decisions when we are in a live position. We cannot take it emotionally. So what I do is very simple: I work with partial sizes: I take profit when the currency gain the same distance to the stop loss level (1:1), the rest I will follow until I reach the target I set before I opened the position. Same for cutting losses- I have a clear stop loss level but I never get there with full position- I cut half of the position half way to the stop loss level. This is how I work, easy and simple to implement. Has its pros and cons but works great for me…
 

TheLastBear

Banned
Jul 11, 2012
192
0
0
I have a clear protocol for money management, which I follow without asking questions. Any trader needs some kind of money management system that he can follow blindly, because we cannot take decisions when we are in a live position. We cannot take it emotionally. So what I do is very simple: I work with partial sizes: I take profit when the currency gain the same distance to the stop loss level (1:1), the rest I will follow until I reach the target I set before I opened the position. Same for cutting losses- I have a clear stop loss level but I never get there with full position- I cut half of the position half way to the stop loss level. This is how I work, easy and simple to implement. Has its pros and cons but works great for me…

Trading is emotionless and it is very important to stick to those S/L set before entering a trade. Glad to hear that you stick with your money management strategy.
 

PaladinFX

Active Trader
Nov 21, 2012
76
0
27
Germany
www.paladin-consultants.com
I concur.

Once you have developed a trading plan, you should stick to it, even if some trades get stopped-out.
Fiddling with T/P and S/L levels of an open trade makes no sense ... how will you know if the trading plan you have worked so hard to formulate is valid and will bring you long-term gains, if you keep changing the parameters of single trades?

It's way better to let the trades run and then, if a pre-determined maximum drawdown (maybe 15-20% of account balance) has been reached, to think about changing the trading plan itself ... well, at least those aspects of the plan which don't seem to work out as you've planned them to.


Cheers,
P.
 

PaladinFX

Active Trader
Nov 21, 2012
76
0
27
Germany
www.paladin-consultants.com
haha, no, of course not.

What I primarily referred to was widening stops to avoid being stopped-out.
An amazing number of people do this regularly ... which makes one wonder why they bother placing stops at all.

In my opinion, the only time one really shouldn't change anything about T/P and S/L (in this case including setting a trailing stop) is in the very early stages of system evaluation.
Here, you really want to know if your S/L will be triggered or not.
But since this is being done on a demo account anyway, being stopped-out won't hurt.

Once one has decided that a trading system is valid, trailing stops are a valuable tool.


Cheers,
P.
 

Maria08

Banned
Oct 23, 2012
49
0
0
Strict money management and risk control is essential to achieve long-term success in the forex market. The high level of leverage available to Forex traders makes it important to manage risk exposure and to avoid overleveraged positions. Successful forex money management aims foremost at the preservation of initial trading capital.
 

Exness Support

Active Trader
Apr 21, 2014
572
1
32
Money Management is the most important aspect of trading. Using right leverage, right position size and setting right stop loss is the key to success in long term.
 

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
24
32
Canada
Despite the fact that most traders are fully aware of it, it is a curious notion that many traders seem to ignore money management all together or pay very little attention to it. The fact that most traders lose money in the markets is not really surprising if you consider that most of them also have no money management plans and mostly ignore the fact that they can lose money on any trade they will enter.
 

triplet

Active Trader
Oct 7, 2014
101
4
27
Money management is a part of forex that cannot be overlook it is very important. Money management and trading plan should go hand in hand because some of the guidelines for money management can be incorporated into your trading plan and that plan should be strictly followed to yield success.
 

chief

Confirmed Tickmill Representative
Oct 27, 2014
217
7
37
haha, no, of course not.

What I primarily referred to was widening stops to avoid being stopped-out.
An amazing number of people do this regularly ... which makes one wonder why they bother placing stops at all.

In my opinion, the only time one really shouldn't change anything about T/P and S/L (in this case including setting a trailing stop) is in the very early stages of system evaluation.
Here, you really want to know if your S/L will be triggered or not.
But since this is being done on a demo account anyway, being stopped-out won't hurt.

Once one has decided that a trading system is valid, trailing stops are a valuable tool.


Cheers,
P.


funny thing, not just at amazing number of people, 99% I'm sure all of traders happen to do such thing :). but most trader improve many ways, some finally found high-end setup, figure better entry analysis with fixed SL, others end up blaming the brokers for stop hunting activity, and never use stop loss anymore, and we all know the rest of story if he decide such way.
well, I;m more with the 2nd one, but I try different approach, silly mindset " 'market price always respect the stop loss most than take profit level'. the outcome : how I got my sl hitted, but still maintain profit. trailing stop is best destination to made. I've done lot of days tested simple mt4 trailing but doesnt meet my expectation, then it all begin the modification. and all the entry exit with 'red' mark, typical stop loss marks, at profitable result at overall.
as you can see below :
hVdNp35.jpg

for maximum result, I suggest ECN based account, other account type has limitation minimum distance order modification based on current market price, as picture above applied with Tickmill trading platfom, which they dont have such limitation upon order modification.
 

seekfxhelp

Banned
Nov 11, 2014
28
0
0
based on many article, most expert suggest 1:2 risk ratio, with 2% lot size for each entry. I think it's reasonable, as textbook given example at winning ratio 50% we can still maintain profit while using 1:2 ratio. i'm trying hard to not widen my SL :), while sometimes I 'accidentally' do that, or I just forgot ever do that, lol.
it's quite nice result Chief, as far I know trailing stop already had automatic feature for SL modifying, and i'm quite sure it has 15 pips minimum for stop loss level, at any mt4 platform, checking at Tickmill platform it's also give same distance (see the pic). based on your post they dont have such limitation, well I saw all my mt4 platform with any brokers also had 15 pips minimum trailing stop distance, or is there something i missed ?

H2rDcE8.jpg
 

stephane

Trader
Jan 29, 2015
19
0
7
I will add my two cents, here. When calculating Stop losses you need to take into consideration the pair volatility, as slippages on ill-liquid pairs may be a real problem for a scalp trade. :eek:

Another point is that on highly volatile pairs, natural volatility may squeeze out your trailing stops from the market. :mad: :eek:

I noticed that the Tickmill MT4 demo platform allows for 15 pips trailing stops, but when I am trading I prefer to manually adjust the stops according to support and resistance levels being broken than to automatically trail my trade. :)
 
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newstart

Newbie
Feb 6, 2015
2
0
2
really i was so afraid and totally against money management at start
but when i trade my self and lost i had to listen to who dviced me to use the money management service
but the problem is that they take big share 40 % of pofit but they do not loss so i am happy
i tried a company called eurfxusd.com and they do well till now, i hope to share my experience with others
tell me more about your stories
 

chief

Confirmed Tickmill Representative
Oct 27, 2014
217
7
37
I will add my two cents, here. When calculating Stop losses you need to take into consideration the pair volatility, as slippages on ill-liquid pairs may be a real problem for a scalp trade.
Another point is that on highly volatile pairs, natural volatility may squeeze out your trailing stops from the market.
I noticed that the Tickmill MT4 demo platform allows for 15 pips trailing stops, but when I am trading I prefer to manually adjust the stops according to support and resistance levels being broken than to automatically trail my trade. :)

dont forget to add daily rang. when scalping, volatiliy are one of kind advantage with any pair, no one would enjoy a ride with a common pace, which only result with small entry signal. :cool:
like I said most mt4 platform put this 15 trail stop at minimum. but when check into Tickmill symbol properties it's definitely had 0 stop levels, which means we can narrow those trail level as lows as 0 point, but we need additional tool ( order management type EA ), unless we willing to modify any stop loss manually by moving the line :).
 

Ary Barroso

Active Trader
Jul 9, 2017
908
71
39
35
Money Management is the most important aspect of trading. Using right leverage, right position size and setting right stop loss is the key to success in long term.


I agree with your opinion! Traders have to select their leverage in order their trading plan, without proper planning high trading leverage wouldn’t be enough here! Besides, they should consider their position size according to the money management rules!