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Practical Formula for Money Management

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Tahajud

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Quote from: mohammad mmufroil on February 10, 2019, 03:26:42 PM
well the content of our discussion is actually that, whatever the system we use must still maintain a large account resilience by owing risk and ow rewards, so almost all traders agree with the strict application of money management
Yes, no matter how much capital we have do not make us make our trading style to be at high risk, because there is always a way to make trading with healthy management even though our capital is small, but do not expect large profits from the small capital with good management



#31 - February 10, 2019, 03:30:33 PM

mohammad mmufroil

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Quote from: Tahajud on February 10, 2019, 03:30:33 PM
Yes, no matter how much capital we have do not make us make our trading style to be at high risk, because there is always a way to make trading with healthy management even though our capital is small, but do not expect large profits from the small capital with good management


well that's right with that, so the trader's mindset about rading will be arranged properly and healthily in the future transaction if it is properly implemented then every trader will treat forex as a business in general
#32 - February 10, 2019, 03:33:30 PM

Tahajud

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Quote from: mohammad mmufroil on February 10, 2019, 03:33:30 PM
well that's right with that, so the trader's mindset about rading will be arranged properly and healthily in the future transaction if it is properly implemented then every trader will treat forex as a business in general

Indeed, forex trading is the same as other businesses, where there must be a process that we go through to be successful, so indeed treating forex trading must be like any other business. Don't expect any shortcuts or instant results, because instant results won't last long and as soon as possible they will disappear
#33 - February 10, 2019, 04:03:26 PM

Sant1

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Quote from: Tahajud on February 09, 2019, 10:35:08 AM
Having so much importance on a Money Management in trading, I tried to share this formula a little, as a basic description.

This formula is to determine the LOT that will be used on MT4 brokers that use 5 digits.

Information :
BALANCE = Capital
RISK uses 1% (can use between 0.1% to 2%)
SL (Stop loss) can use 25-50 PIP (it's up to each trader)
OP is done = 4 times the OP with a ratio of 3 loss: 1 profit

FORMULARS are as follows:

Lot = ((Balance x Risk) / OP) / SL

For example $ 100 capital
The formula is:
Lot = (($ 100 x 1%) / 4) / 25
Lot = 0.01

It is better if the SL uses a distance of 25 pips, then the TP distance is 100 pips.
If 3 x OP loss with the amount of $ 0.75 and when you TP at OP 4 with a profit of $ 1, of course you still get a profit of $ 0.25.

It looks small, but with MM that is good and right, it is certain that the funds we run can be far from the large loses

this is an example of a Money Management Model


a good management money formula, and only uses 1% on each transaction, it will make it safe in a transaction.
but to get the profit will also be difficult and also a little. because the ratio of risk and reward is lame.
#34 - April 10, 2019, 10:21:53 PM

adinata

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Any Money Management method is basically rooted in the question of how much money you dare to risk. "Risk" here can be interpreted as the risk of loss you want to take per trade.
#35 - May 21, 2019, 08:51:03 AM

King Cobra

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a good formula sir, simple but according to me profitable and easy to implement, it's very clear.
#36 - May 21, 2019, 08:54:16 AM

Daniel207

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Quote from: adinata on May 21, 2019, 08:51:03 AM
Any Money Management method is basically rooted in the question of how much money you dare to risk. "Risk" here can be interpreted as the risk of loss you want to take per trade.
Every profit / reward we want to get must be ready and ready with what will be obtained. this also includes the RR strategy.
#37 - May 21, 2019, 11:12:17 AM

Peters

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Quote from: Daniel207 on May 21, 2019, 11:12:17 AM
Every profit / reward we want to get must be ready and ready with what will be obtained. this also includes the RR strategy.
lots of formulas and strategies made based on management money. one of which you discuss is RR.
#38 - May 21, 2019, 11:17:48 AM

Daniel207

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Quote from: Peters on May 21, 2019, 11:17:48 AM
lots of formulas and strategies made based on management money. one of which you discuss is RR.
means that it proves how important money management is in forex trading.
#39 - May 21, 2019, 11:19:15 AM

ASHfx

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Quote from: Tahajud on February 09, 2019, 10:35:08 AM
Having so much importance on a Money Management in trading, I tried to share this formula a little, as a basic description.

This formula is to determine the LOT that will be used on MT4 brokers that use 5 digits.

Information :
BALANCE = Capital
RISK uses 1% (can use between 0.1% to 2%)
SL (Stop loss) can use 25-50 PIP (it's up to each trader)
OP is done = 4 times the OP with a ratio of 3 loss: 1 profit

FORMULARS are as follows:

Lot = ((Balance x Risk) / OP) / SL

For example $ 100 capital
The formula is:
Lot = (($ 100 x 1%) / 4) / 25
Lot = 0.01

It is better if the SL uses a distance of 25 pips, then the TP distance is 100 pips.
If 3 x OP loss with the amount of $ 0.75 and when you TP at OP 4 with a profit of $ 1, of course you still get a profit of $ 0.25.

It looks small, but with MM that is good and right, it is certain that the funds we run can be far from the large loses

this is an example of a Money Management Model


Good management calculation, have you applied this to your trade?
in my opinion, it must be a little bolder in taking risk so that the reward is also greater.
#40 - June 11, 2019, 02:25:33 PM

Jajami

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Using a money management formula is very necessary to use, to maintain capital stability and away from large risks / margincall.
With the use of 1-2% risk of capital is good and safe.
#41 - August 16, 2020, 11:58:16 AM

Mochira

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Money management must be calculated carefully, capital, risk, targets etc.
The formula given to this topic is good and very helpful for novice traders who don't have good money management.
#42 - August 18, 2020, 02:03:52 PM

FzFx

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a pretty good formula but no matter how good a formula is, it will not necessarily be suitable for all traders because each trader has a different strategy including a risk management strategy or MM strategy.
#43 - August 19, 2020, 03:51:18 AM

Rizky_Rizal46

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money management is usually applied in every transaction so since we practice making transactions we should also practice using risk management, the MM formula is also quite important for every trader to learn
#44 - August 19, 2020, 05:31:16 PM

Aryox

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money management does need to be implemented and we must apply it properly and in accordance with the trading plan that we make so that the risk and profit target can be balanced or optimal.
#45 - August 20, 2020, 05:56:00 AM
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