thread: Money management - What is the secret?

But what happens when you lose 6 in a row? You continue adding more risk each transaction? Plus, as you lose 60% of the time your risk per trade tends to drift higher and higher.

Your idea is quite like Martingale.
Sometimes it breaks down as you simply don't have the bank to endure a lengthy series of losses.

This doesn't have anything to do with being (I quote from the article above) wrong to predict that the winning ratio of your egy. Even with a perfect forecast of the average success rate, you will inevitably at some point in time encounter a chain of losers, just like you will occasionally encounter a collection of winners. If you don't know that, it is better to stay out of the business - and from the gaming business.

40763

Your idea is quite like Martingale. Sometimes it breaks down as you simply don't possess the bank to endure a series of losses. This doesn't have anything to do with being (I quote from the post above) incorrect to forecast the winning ratio of your egy. In spite of a prediction of the average success rate, you will at some point in time experience a very long chain of losers as you'll sometimes encounter a very long series of winners. If you don't know that, it's better to stay out of the business - and out of this gaming...

Exactly. Unfortunately these kinds of MM tactics don't work or we'd all be rich. He had to do would be to move a coin 50 times and he will likely find a few streaks even.

Thing if you're trading with a goal to lose or make 1,000 pips based on fundamentals or 5 pips based on technicals price can go up or down. If your fundamental view is correct, it can move a few pips, maybe several hundred. So what we should do? This simple thing that Hanover mentioned. Keep your position sizes small. This way if you are meagerly about the market movements, cannot lose much and for extended. ....and not dropping for extended is the money management in trading Currency Market.

95070Far overly preoccupied (and a bit absurd, too ).

Just trade and stop putting TP's that restrict your profits, as that's the principal restriction on doing nicely. Put on transactions with a reasonable lot dimensions (rough estimate, based on capital, margin, other transactions available, etc.) and then stick with this. As the capital increases, you may start to raise the lot size straight proportional (or slightly slower, to decrease risk). If capital begins to diminish, then reduce the lot dimensions.


All of this predictive counting of percent losers and percent winners only seems like fingers in the wind.


ROI is something that you do at the end of the week or month to either give you a wake-up call which you are not doing as well as you need to, or doing very well and possibly wish to re-assess the risk taken, to make sure it has not been out online.

95070The secret would be,

you are allowed to shed...

But have you ever allowed for this?

95070

The secret is, you are allowed to lose... But do you have allowed for this?

Spot on,,,

Yes that is right.... You're allowed to be wrong, you are allowed to be correct, you are allowed to be whatever the fuck you wish tonight.

But you gotta fight

95070

quote Spot on,,, Y

Due

Inserted Video

95070

I wish to recall again this is not a trading platform! A way to manage cash in a better way, you have the possibility to have the exact same drawdrown, but greater profits! This is not martingale.

Hmm again as you don't give the algorithm I can not be sure of the following but... you increase the size once your recent history winrate is under the average winrate and you reduce the size once the current winrate is above average. The size increases, when you get a string of losers. A fixed or a MM is going to not be BIGGER than the DD. For exactly the identical reason when you get an unsual series of winners you reduce the size and so limit the profits. The profits will be LOWER than a MM or a fixed. If you post the algo I could look in the thought. However, for now it is really looking like the http://en.wikipedia.org/wiki/Gambler's_fallacy. And that has nothing to do with the acuracy of the estimation of the winrate. It's possible to use a coin, with understand chances, to check by yourself: extended sequence of thoughts will take place.

95070When you're using a system it is not possible that you obtain a cash management technique that's statistically any better than the percentage. You can get fooled very easily by simulations (or historical results too ), since any profitable simulation/historical result gains from aggressive lot size increases above the average drawdown period depth, simply because in the simulation it's a simple fact that the machine always recovers. When a machine reaches a DD than that which you see on your simulator //history you may run into a hole than you'd have if you hadn't used this kind of management. Since PipMeUp says a mirage where cash management hides simulated/historical loses at the cost of much worse loses when conditions change beyond those of their simulations.

However once you have several systems (I generally trade 100 algo egies in some time), there is a lot you can do to play with your risk alloions to diminish risk and raise potential profits. When you trade arrays of systems you find a whole new world opening up.