Mohammadfoad Jalaeizadeh
Today, I discovered an amazing tool in meta trader! Actually, it is one of the hundreds of buttons you see everyday in this software. You can see it in below picture.
INSTEAD FOCUSING ON THE VALUE OF PROFIT AND LOSS SHOWN IN TERMINAL WINDOW, CLOSE IT WITH THE CLOSE BUTTON AND FOCUS ON YOUR TRADES AND MANAGING THEM AFTER YOU OPENED THEM!
INSTEAD FOCUSING ON THE VALUE OF PROFIT AND LOSS SHOWN IN TERMINAL WINDOW, CLOSE IT WITH THE CLOSE BUTTON AND FOCUS ON YOUR TRADES AND MANAGING THEM AFTER YOU OPENED THEM!
Mohammadfoad Jalaeizadeh
A QUICK GUIDE TO MONEY MANAGEMENT
First, you have to calculate your risk amount for each trade, based on your maximum acceptable percent of drawdown that depends on your characteristic. Also, you have to get maximum consecutive losses of your system. You can have this value by back testing your system.
Risk per Trade = Maximum percent of acceptable drawdown/Maximum consecutive losses of the system
Now, you can calculate allowed volume for each trade.
Allowed Volume = (Risk per Trade * Initial Deposit) / (Pip value * Stop loss amount)
NOTE: Allowed volume should be calculated based on initial deposit, not account balance. Otherwise, increasing account balance increases allowed volume and decreasing account balance decreases allowed volume. As a result, in drawdowns, allowed volume will decrease and it will be harder to compensate previous losses. In other words, possible profit or loss in previous trades has not effect on the allowed volume of the next trades.
First, you have to calculate your risk amount for each trade, based on your maximum acceptable percent of drawdown that depends on your characteristic. Also, you have to get maximum consecutive losses of your system. You can have this value by back testing your system.
Risk per Trade = Maximum percent of acceptable drawdown/Maximum consecutive losses of the system
Now, you can calculate allowed volume for each trade.
Allowed Volume = (Risk per Trade * Initial Deposit) / (Pip value * Stop loss amount)
NOTE: Allowed volume should be calculated based on initial deposit, not account balance. Otherwise, increasing account balance increases allowed volume and decreasing account balance decreases allowed volume. As a result, in drawdowns, allowed volume will decrease and it will be harder to compensate previous losses. In other words, possible profit or loss in previous trades has not effect on the allowed volume of the next trades.
Mohammadfoad Jalaeizadeh
"If you're too scared, the market won't give you.
If you're too angry, the market will take from you.
If you're prepared or composed, the market will reward you.
The market is basically trying to teach you emotional balance."
If you're too angry, the market will take from you.
If you're prepared or composed, the market will reward you.
The market is basically trying to teach you emotional balance."
Mohammadfoad Jalaeizadeh
Excellent book, tells you the exciting stories that create those waves you see in your trading platform!
It is also translated to Persian and you can find the translated version in bookstores.
It is also translated to Persian and you can find the translated version in bookstores.
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Mohammadfoad Jalaeizadeh
Last night, I made a big and repetitive mistake. With a bad money management, I lost about %6 of my balance. It means that I ruined all the efforts of last 2 weeks.
Mohammadfoad Jalaeizadeh
In last 2 months, I have been trading just on AUDUSD. You cannot believe how much you are more concentrated and your stress level is lower when you just trade on one pair. Also, I am more satisfied with my performance.
Maybe in future I change my pair to EURUSD or XAUUSD.
Maybe in future I change my pair to EURUSD or XAUUSD.
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