Experience Risk Management Risk Management in Forex Trading
Photo above is a survey of more than 100 Trader FXCM, by collecting the actual trading results of multiple transaction Trader, most have in common is willing to accept more loss of profit, meaning that each placing trading orders, they accept Stoploss much higher than the profit Take Profit, loss VND10 ready to recover copper 2-3.
Managing capital are as follows:
Examples existing trading account balance are: $ 5,000
The maximum loss level is acceptable for each order of 2%, by $ 100.
Before placing trading orders, should consider the following indicators. For example you trade on the principles of two moving averages intersect (MA 5 cut MA 10 for example), after determining the point on should be prepared before the stop loss point. If "agreement" is likely a loss greater than $ 100, you should ignore this opportunity.
Photo above is a situation actual transactions trending trend , trading methods are under clearance and pricing models , this is the most basic form of pattern in the price action approach. In the previous topic with instructions dotcomtech.net interstitial Trendline trendline directly on MT4 software to facilitate observation, the picture above also do the same to have a home channel Channel. This is a trend, it is easy to see, do not imagine 😀
Entry point is at Trendline support, here is 0.9580
- Objectives profit increased lad kept command of the price channel on Channel Amplifier, at 0.9810 area
- Stop losses Stop Loss at 0.9465.
- Thus profit target is 230 pips
- This damage if eaten Stoploss orders : 115 pips
- Assuming this transaction account which is: $ 1,000 and the maximum acceptable loss of 2% => $ 20 .
- If the set volume, the volume is 0.05 lot 115 pips would suffer losses: $ 57.5
Many Trader when asked about the exchanges they learn immediately to the maximum possible leverage transaction or as high as possible. Thus very adventurous, as formulated risk management above, if unfortunately this trade loss orders, only lost $ 11.5 only. With a $ 1,000 account you can still place orders lot there but losses 0.05 to $ 57.5 as "batch number"
There is even a mandarin - Have liver enrichment: If you accept a high level of risk, you should understand the concepts like Margin Call (Score capital call), each exchanges offer the financial leverage (leverage) different and figure% while total all touch commands will be automatically Close biggest negative command or touch how much shall be Close all commands (case open multiple command). Ask advisory support their trading floors for exactly these figures. Specific examples at forex.com uk floor. If Margin Level touch tone commands 90% of the most automated system was closed while hitting 50%, all are in the open state order will be closed immediately.
More info : If you are learning about the Forex market and trading platform then watch carefully this introductory article: What is Forex? Basic knowledge about the Forex you need to know . This article explains in detail the concepts like Margin Call , Equity , ... show on MT4 software when open command (Open).Each month there are 10 opportunities such transactions, for example with a $ 5,000 account and Max Loss = 2% ($ 100)
- Ratio Word: Lo average 2: 1
- Stoploss orders were hit number 3 command - For each command loss => Damage $ 300
- Number of wins orders: 7 command - Assume each order is urgent for losses ($ 200) => Revenue was $ 1,400
- Profit = Revenue - Cost = $ 1.400 - $ 300 = $ 1,100
- ROI (Return On Investment) = $ 1,100 / $ 5,000 = 22%.
UPDATE MONEY MANAGEMENT TOOLS CALCULATION
Today find an Excel spreadsheet tools to calculate the volume before the command is quite useful, please share it with everyone:This is a response to rapid volume calculated for each order depending on the account balance and the current opportunity ear:
User manual:
There are 2 parts to enter the account at the present time:
1. ACCOUNT INFORMATION EXCHANGE:
This section Balance Balance Input Rate% Risk and accept. Account with the Standard when 1 lot, each pip worth $ 10 Account For Mini when trade 1 lot, each pip cost 1 USD.
2. ORDER INFORMATION:
This section fill command and exit points in order after analyzing the market. Specific examples are as follows:
- Scores on : BUY EURUSD 1.3310 price
- Stoploss point : 1.3280
- Goal TP 1 at: 1.3360
- The likelihood of success in Objective 1: Complete 100% if completely believe in the ability to win matches.
- Objective 2: 1.3360, if you just do not aim at Target 1 Target 2 fill.
In illustration of this right, shall be construed as follows:
Mini Account, current account is $ 1.000, the highest% acceptable risk is 2%, so the maximum acceptable loss $ 20 for this transaction command.
After technical analysis, intended to Buy EUR / USD 1.3310 and Stoploss price 1.3280 => Hole 30 pips and profit objective at 1.3360 TP => Word 50 pips. In fact, the probability of higher profits because the trend should continue after hitting Target 1 can profit Stoploss partial or moved to breakeven to eat thicker in Target 2.
Tools made recommendations to put Volume is 0.67 lots. So if rated 0.67 when sticky Stoploss lot would be $ 0.67 * 30 pip ~ $ 20. In fact, few people slip command because the majority liked "eat'm wearing durable" should tend to take profits off the most swiss achieve. So when using this Excel spreadsheet, you do not need in the details for the loss of the target 2 enter target just one is okay
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