Thread: Noob question about Money Management

Originally Posted by ;

As far as I know he opens up to two trades concurrently with the identical amount. Thanks for your question...

You're welcome. But assume that there was one order . Then assume you spy a great trade and start to figure your risk. 10%, 2%, all percent.

Would you

A) Require a proportion of current -in the instant - equity.

Or

B) Require a proportion of your would-be equity, if the one available trade dropped.

For instance:

Balance: $1000
You are in a trade that is up $200 - using a stoploss that would potentially lose you $300 when it turned another way. The trade is in-progress.

So current equity: $1200.
Would you compute Risk capital like this:

1200 * .02 = $24

or

700 * .02 = $14

I always take off that 2% for each and every position open, and work with that subtracted equity. But in case you've got several trades which are ready to open, I would rate them (1-5 for instance ) based on your own system and which ones have become the most promising to have the first 2%, and also the smallest fitting to have the previous 2%. .
i hope i make sense

Originally Posted by ;

I always take off that 2% for every position open, and utilize that subtracted equity. But if you have multiple trades which are prepared to open, I would rate them (1-5 for instance ) based on your own system and which ones have become the most promising to have the first 2%, and also the least fitting to have the last 2%. .
I hope I make sense

Yes and yes. This is what I was searching for, a subtracted finish equity. My beloved broker displays a floating equity.

Yah with all the (1-5) instance, I see just how this would makes sense if you should put 5 trades at once. Thank you for the help.

That question was simple right.

Ok, so for a novice trader what ought to be the threshold then you give up trading micro and proceed for mini? $2500 or something else? Or maybe N quantity of months of constant profits?

Originally Posted by ;

You are welcome. But suppose that there was one order . Then assume you spy on a trade and start to figure your risk. 2%, 10%.

Can you

A) Take a percentage of current -in the moment- equity.

Or

B) Take a percentage of your prospective equity, even if the one available commerce dropped.

For example:

Balance: $1000
You are in a trade that's up $200 - with a stoploss that could possibly lose you $300 if it turned another way. The transaction is in-progress.

So current equity: $1200.
Can you compute Risk capital for example this:

1200 * .02 = 24

or

700 * .02 = $14

OK, I understand the math.

For a newbie treder I might risk 2% of smaller funds (lessen by the sum in a current transaction ) -$14, as a veteran - likely 2% of overall. There's a third method - 1000 or whatever 700 plus SL moved into a new point.

It is dependent on estimation in the event the second trade is in fact soooo excellent. Newbie Can't asses (do I use the right word? ) Correctly the potential I think.

But the appropriate response is - do you really feel comfortable with the first or the second amount? In case

I feel that non-emotional dealing and saying occasionally no to riskier opportunities is a long-term key - to success. FX to me is like a climbing into a high quality of a skyscraper - should you attempt to run on a stairs failure and wound is an issue of time.

Should you climb safely step-by-step - finally you arrive at the top. The second solution is far surer and safer.

Hope that this helps...

Originally Posted by ;

Ok, so for a beginner trader what should be the threshold then you stop trading micro and proceed for miniature? $2500 or something different? Or maybe N amount of months of consistent profits?

I frankly do not see any reason to move out of a Micro into a Mini account.

Originally Posted by ;

As far as I know he opens to 2 transactions concurrently with the identical quantity. Thanks for your question...

I asked this friend how far he risks in each transaction and I am SHOCKED.

He replied - 33% of account.

Yeah...

You might take a look at this thread


https://www.forexsoutheast.asia/cryp...tion-indi.html

the volume you risk really depends on the performance of your system. In case you systems expectancy is under 0.00 you shouldnt risk any whatsoever

Originally Posted by ;

Hi all,

I have a newbie question about MM.

I would like to start a live account in near future. I am planning to invest no more than $500 - $1000 for today.

Now the question, as I know based on MM I should not risk more than 2% of my core equity, and have no more than 10% open trades.
As I know I need a micro account and once I manage to increase it to $2500 (as 2% of $2500 is $50) I will update it to a mini account.
However, I read a post by dialist where he suggests to open mini account only when one has collected $30,000 in the account. However, 2% would be $600 which is 12 miniature lots in one trade. Isn't that better suited for standard lots?

Also, as a side note, anyone knows a good micro broker, which allows easy appliions for global traders. I am currently demoing using InterbankFX, but unfortunately they do not seem to offer micro accounts (they state they do on the website but MT4 doesn't seem to have that choice ) and require jumping thru hoops (i.e tons of documents ) in order to start an account,

Thanks for your help!

There is a very very popular broker, possibly the most popular broker who offers accounts of any dimension and allows you to exchange positions of any dimension, down to $1 total place dimensions. It is possible to start an account in one day. PM me if you do not know who I am talking about

Originally Posted by ;

Ok, so for a beginner trader what should be the threshold then you stop trading micro and proceed for mini? $2500 or something else? Or perhaps amount of months of profits?

If you want to examine a system reside with actual money solely for the emotional aspect of it. . Use Oanda. They allow you to exchange pennies/pip. If you do not have a strong and well tested system you shouldn't use actual money. At least with Oanda, you can drop a total of 5 or something about a very valuable lesson, as opposed to $50 or more.