Money management is the key point of a forex trader, but how much people do it accurately?

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Dear Traders,

Lets discuss about how much people understand Money management accurately? Very rare % people can understand i think. Even after 20 years of trading someone can't calculate his money management precisely, why?  

The calculation of money management is not same for all . It depends on some factors of Trading balance, type, traders characteristics, traders emotions & psychology etc. Let us show our calculation on the based of just only $1000 account balance. It will be very helpful for us.


Regards,

Piousmore

Money Management

 

Pls show your calculations.

I already prepared as like as follow. Please comments about it.

  MM Faster

MM Slower

MM Standard

 
What is R/day? What does it mean?
 
VIP Trader: Lets discuss about how much people understand Money management accurately?
Never risk more than a small percentage of your account, certainly less than 2% per trade, 6% total.
  1. In code (MT4): Risk depends on your initial stop loss, lot size, and the value of the pair. It does not depend on margin and leverage.
    1. You place the stop where it needs to be — where the reason for the trade is no longer valid.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.
    2. 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.)
    3. 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 2017.10.10
                Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum 2018.02.11
                Lot value calculation off by a factor of 100 - MQL5 programming forum 2019.07.19
    4. You must normalize lots properly and check against min and max.
    5. You must also check FreeMargin to avoid stop out

    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.

  2. Search for a GUI/Trade Assistant EA like mine (for MT 4): 'Money Manager Graphic Tool' indicator by 'takycard' - Risk Management - Articles, Library comments - MQL5 programming forum - Page 6 #55
 

Brian Rumbles:
What is R/day? What does it mean?

Amount of "Loss/Day" is the daily risk (by 15 Pips)

 

Does this Work well for you? Are you profitable?

For Risk Management I have been using 0.01 lots for a trade on a $500 account which could have a SL set at 1% or $5. For a 15 min chart scalping (small TP) this can be a fairly wide open SL.

So I agree with the point that you can close the trade before this when the conditions of your original trade are no longer valid like if the trend changed.

Therefore most of these manual closes would probably be less than the $5 maybe like $2.5.


If the trade is going moderately against you but the original condition is still sort of valid then use trailing takeprofit.

If high conviction in a trade then use lots 0.05 which would be a 5% SL if the SL is reached.


If trade is still valid and it goes against you such that you consider the condition to be great value and you used the conservative lots then can add an extra trade up to the total of 0.05 lots

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