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New money management thinking

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rockknmike
330
rockknmike 2014.04.15 20:05 

Imagine if all your losing trade reach a break even point and all your winner run as you decide ?

How to do that ?


Example: EURUSD

You enter Long 1 lot at 1.4000

but the market goes opposite direction

You enter Short 2 lot at 1.3990

market goes the opposite direction again and go back at 1.4000, you enter Long 3 lot ... and so on.


When the market make a move of 20 pips one way or another you will reach the break even point, you can close it all.


Of course, when you are right at first you let it go for profitable trade.

Stay away from news and high slippage...  that's all

 
Francis Dogbe
9501
Francis Dogbe 2014.04.15 21:30  
rockknmike:

Imagine if all your losing trade reach a break even point and all your winner run as you decide ?

How to do that ?


Example: EURUSD

You enter Long 1 lot at 1.4000

but the market goes opposite direction

You enter Short 2 lot at 1.3990

market goes the opposite direction again and go back at 1.4000, you enter Long 3 lot ... and so on.


When the market make a move of 20 pips one way or another you will reach the break even point, you can close it all.


Of course, when you are right at first you let it go for profitable trade.

Stay away from news and high slippage...  that's all

 
I have been a victim of that trading style. its mostly happens out of fear and lack of strategy.  
Ronnie Mansolillo
5495
Ronnie Mansolillo 2014.04.16 00:26  
it seems to be a fast way to bankrupt
Rogerio Figurelli
Moderator
39638
Rogerio Figurelli 2014.04.16 01:18  
rockknmike:

Imagine if all your losing trade reach a break even point and all your winner run as you decide ?

How to do that ?


Example: EURUSD

You enter Long 1 lot at 1.4000

but the market goes opposite direction

You enter Short 2 lot at 1.3990

market goes the opposite direction again and go back at 1.4000, you enter Long 3 lot ... and so on.


When the market make a move of 20 pips one way or another you will reach the break even point, you can close it all.


Of course, when you are right at first you let it go for profitable trade.

Stay away from news and high slippage...  that's all

 

Hi rockknmike, don't forget that each time and step you lose, you pay the spread and must increase your 20 pips target to survive.

And, after doing this several times, like betting and pure Martingale strategies, sometimes market will increase the steps in a way you will lose all your money. 

rockknmike
330
rockknmike 2014.04.16 06:07  

It is not a real martingale. In the sense that you raise your bet but in the opposite side since you don't add to your loser like a martingale.

I surely agree with you that a martingale strategy is a suicide.


Fear and lack of strategy ? May be, it is true that I can't pick 90% of winner ... good for you if you can.

If I was able to do that I will apply a reverse martingale. Right now I subscribe to signals that apparently pick winners in that kind of rate with a controlled drawdown

and I apply a reverse martingale strategy. 


That idea came to me as a mathematical formula to cut loser without any real risk except the spread. Honestly, how many back and forth 10 pips movement could happen before a 20 pips swing ?

Even if it happen 10 times ... it would not be a disaster.


My thinking is always risking small to aim high ... 


Anyway i am testing the water on a demo account and I will give more insight about it after a couple of weeks.

Ronnie Mansolillo
5495
Ronnie Mansolillo 2014.04.16 09:54  
rockknmike:

It is not a real martingale. In the sense that you raise your bet but in the opposite side since you don't add to your loser like a martingale.

I surely agree with you that a martingale strategy is a suicide.


Fear and lack of strategy ? May be, it is true that I can't pick 90% of winner ... good for you if you can.

If I was able to do that I will apply a reverse martingale. Right now I subscribe to signals that apparently pick winners in that kind of rate with a controlled drawdown

and I apply a reverse martingale strategy. 


That idea came to me as a mathematical formula to cut loser without any real risk except the spread. Honestly, how many back and forth 10 pips movement could happen before a 20 pips swing ?

Even if it happen 10 times ... it would not be a disaster.


My thinking is always risking small to aim high ... 


Anyway i am testing the water on a demo account and I will give more insight about it after a couple of weeks.

Hi rockknmine,

even if I believe is a suicide maybe with some correction could work. Anyway an important strategy is always to cut losses and let run profits beside money management tecnique. So maybe is better to earn much more from winning trades so you can cover even 7/8 losses in a row.

Kiran Chandekar
1472
Kiran Chandekar 2014.04.16 18:27  
Rosiman:

Hi rockknmine,

even if I believe is a suicide maybe with some correction could work. Anyway an important strategy is always to cut losses and let run profits beside money management tecnique. So maybe is better to earn much more from winning trades so you can cover even 7/8 losses in a row.

opening trade as % of capital is best money management technic
Rogerio Figurelli
Moderator
39638
Rogerio Figurelli 2014.04.16 18:50  
rockknmike:

It is not a real martingale. In the sense that you raise your bet but in the opposite side since you don't add to your loser like a martingale.


For sure, note, I said "like" betting and pure Martingale strategies, not that your strategy is betting or pure Margingale.

Anyway, the problem of such strategies is the illusion that the market (and statistics) never will be so bad to bankrupt, as stated by Rosiman.

Ronnie Mansolillo
5495
Ronnie Mansolillo 2014.04.16 21:46  

agree that "opening trade as % of capital is best money management technic" I personal use percent of free margin (but fixed percent). using a percent of free margin that doubles or changes is another thing.

They both are a money management system.

I believe there is not much diffrence between an account bankrupt and loosing 70/80% of balance to follow a dangerous money management system.

Anyway I suggest severals backtesting. If you have such reports please share with us it can be very helpful.

Rogerio Figurelli
Moderator
39638
Rogerio Figurelli 2014.04.16 22:18  

As the topic title is generic and about "new money management thinking", maybe this is a good start to think is such ideas like "opening trade as % of capital is best money management technic".

In this case, what you guys do, for instance, when you open such trades and lose most of them? Change the money management or change the strategy? Or any other solution?

Mehrdad Shiri
4481
Mehrdad Shiri 2014.04.17 00:24  
try to build an expert ( i think : this is not good strategy )
123
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