Get started

Moneymanagement

Risk Management - how not to lose your moneyLet's say you're new to trending. You have a deposit - for example, $ 10,000 - which you are ready to invest in earnings. And you come to the market with one thought - how to make more money! Stop! The first question that you should ask yourself before starting trading is: "How not to lose the money you already have?" Risk management will help you with this. There are many different "chips" and rules in order not to drain the deposit (and we will definitely talk about them in more detail). But today I want to discuss the most important rule: setting a risk limit. Different traders will give you different numbers. Someone considers the optimal risk of 5% of the deposit amount, someone - 7%. But everyone agrees that the amount should not exceed 10%. If a person tells you that you can bet more than this amount, he is not your friend. I believe that 1% of the deposit is optimal for beginners to trade. Few? No, it’s enough to make money and not enough to sell the house in case of failure. Above is a table with comparative risks - how much and how quickly you can lose depending on the percentage. I'll take $ 10,000 as an example. In this case, 1 percent of this amount will be $ 100. $ 100 is 0.1 lot to open a deal. This means that 1 pip on the chart will cost us $ 0.1. Maximum drawdown is the number of points that the price must go through in order for us to lose money (or, conversely, to earn). For example, the EURUSD currency pair can pass 1000 points per day. As you can see in the table: trading with an acceptable rate of 1% in case of failure will deprive us of only $ 100 10% - already $ 1000. 100% - all $ 10,000. Yes, if we succeed, we will be in the big plus. But the risk also increases. If you are a beginner trader, don't risk your capital. Open deals starting from a 1% deposit. If you are experienced... You can assume that I am conservative, but I also advise not to use more than 1% of the deposit. However, you are free to choose the percentage that is safe for you based on your background and strategy. ______________________________________________________________ Share with us what risk limit do you use in trading? Why choose this one? What other risk management rules do you want me to talk about?
Education
by DeGRAM
16
Potential short term downside. Personally I plan to hedge out the difference since I had a relatively reasonable entry. Of course I keep a rather wide stop (given the relatively small size of my position) a bit bellow Time Weighted Average Price (TWAP; lowest plain line). That would be the worst case scenario, my entry and long position is based on qualitative (bottom up) analysis. The stop is still, in my opinion, necessary as if the the price breaches far below that my position wouldn't make any sense on any time frame below 3 years. Please note that the arrow is just there to illustrate the potential downside I plan to hedge against. It's not a price prediction, I can't see the future. My short term goal at any given point is always to limit the risk and protect profits. The money will just show up if I'm consistent.
NYSE:KO
by unsignedlemon
AUDJPY SELL X2A good opportunity with 2 options. Sell now or sell in case of break. What are the advantages and disadvantages? If you sell now: - The stop will be small - just above today's candle. - The profit will be higher - 140 pips. - It is more risky - there is no confirmation of the movement. If you sell after a breakout: - The stop will be bigger - above the previous peak. - The profit is smaller - up to 73.05. - Lower risk - there will be confirmation and break. Which option to choose depends on your risk appetite. In both cases, calculate correctly the volume with which to go in! For additional questions about money management you can contact us! Like and comment to support us!
Short
by ForexTrendline
2
💥 Money Management (MM) and Risk Management (RM) 💥Hello, my dear friends🧡 🔊I would like to talk a little about money management and risk management. 🙌🏻That’s very important in trading. Because trading isn’t only psychology. 🙅🏻‍♀️Your financial result depends on how competently you can manage your available capita l💸. 🤜🏻 Risk management - determining the maximum position volume in a transaction and the maximum stop value. 📌 Never enter the market with one position on all available capital. The most common money management tactics: ⭐ trade in all capital ⭐ fixed lot ⭐ fixed percentage ⭐ optimal percentage ⭐ safe percentage ⭐ fixed proportion 👌🏻But no matter what money management tactics you choose, the essence will stay the same - you should always consider your risks (the amount, that you will lose in transaction). If You entered the deal, You should always put Stop Loss, and keep in mind the price level after which you MUST close deal. ✔The concept of positive mathematical expectation✔ The average value of your profits must be higher than the average value of your losses. THE MOST IMPORTANT RULE IN THE MARKET: 🔴 DON'T STOP! ❣Do not worry about your losses❣ 🤜🏻Only on your own mistakes you can learn to be successful💋💋💋 And of course, 👉🏻don’t forget about improvement of your skills.💪🏻 😉Read my EDU posts and everything will be cool :) 🌹Stay with me🌹 Your Rocket Bomb🚀💣 My previous ideas 👇🏻
BITSTAMP:BTCUSDEducation
by RocketBomb
13
EURNZD Buy UpdateSee my last trades of this pair, been trading it since the bottom of the weekly channel. Since the last update and entry at 1.7250 area, pair is currently up 500 pips with lots more opportunity to go. Indicators: 1. Weekly upward channel holding and pair bounced off bottom of channel. 2. Weekly RSI in buy zone. 3. We are creating higher highs and higher lows. Entry @ 1.7630 area (past resistance becoming new support. Expecting pair to retrace down where we can reenter safely. TP 1: 1.7900 TP 2: 1.8537 Good luck trading! Charles V www.cvfxmanagement.com @cvfxwealth Trading made Simple 20% July 2020
Long
by cvfxwealth