Examples: Fallacies, Part 1: Money Management is Secondary and Not Very Important - page 2

[David Lynch]

Correct me if I am off base here, but shouldn't money management NOT be based on lots per balance....but instead be based on RISK per trade? Instead of calculating .1 lot per $1000, calculate lots based on the stoploss for the particular trade. So, say you want to risk 3% of your balance per trade, then based on the stoploss for that trade say it is 30 pips, maybe calculated on the low of the previous bar...say...Open[0]-Low[1]+(2*Point) and your balance is $1000 then the 3% risk is $30, so 0.1 lots at 30pips risk =$30. It LOOKS the same as the .1 per $1000....UNTIL you run into the money management scenario discussed initially in this article where exponential "dints" made HUGE drawdowns. Using risk to calculate the lot would keep the "dints" proportional. I will see if I can modify lucky EA to use risk MM.

[mybzi]

very good article, for I'm quite interested in this topic recently.

[mybzi]

VeryGood Article and Clear Points, I love it!

Btw,When can we read Part2?

[[Deleted]]

Related to this, check out this comment from Pawel Wojnarowski on a MM poll:
https://www.mql5.com/en/forum/16514#comment_715789

What a beautiful table. Beautiful.