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Moneymanagement

AUDUSD- GOLDEN POCKET BOUNCEAUDUSD play here golden pocket bounce/double bottom RSI. You guys need to figure out own stop loss take profits etc... Once again my main swings will be formatted simple and organized. These plays like golden pockets, fibo levels are given to you and its up to you on what to do with them! Please keep in mind that I do not give Financial advice. Everything I post here is for educational purposes only and I am simply just sharing my ideas on where the market may be heading. They are not meant to be followed blindly. If you guys like what I post here please leave a comment and share my page. I am also open to help you guys with any setups you may have as well. Thanks and take care! my.myfxchoice.com Use this sign up link to get a 15% bonus on your deposit. This is the best broker I used in terms of quick withdrawals and support. They also let you deposit bitcoin so thats a bonus!
by Pip-Thief-Mike
Money Management 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Money Management 101 Are you receiving a win-rate of more then 60% and still loosing money?? Money Management may be an area that you need to focus on. It is an essential element in becoming a professional trader. Listed below are 4 Simple Steps To Evaluate Your Financial Health; 1. Position Sizing A portfolio of $... and I decide to only risk 2% on a trading strategy 2. Capital - How much? A portfolio of $.... 3. Loss - How much? I must be right more then 50% of the time, but win more money on winning trades versus losing trades. I will use stops and limits to enforce a risk/reward ratio of 1:2 or higher 4. Profits - What? A profit/loss ratio refers to the size of the average profit compares to the size of the average loss per trade. For example, if your expected profit is $1500 and your expected loss is $500, the P/L ratio is 3:1 Please let me know if you have any questions :) Happy Trading "The simpler it is, the better i like it" Peter Lynch
TVC:GOLDEducation
by SMPTrader
Money Management & Psychology 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Money Management/Psychology Cycle of Market Emotions The Upturn • Optimism: The normal financial specialist enters the market feeling hopeful. They may likewise have elevated requirements for the profits in which they are involved. • Excitement: When the market goes up, the desires begin to end up noticeably a reality and the financial specialist encounters commitment. • Thrill: The market proceeds up and the financial specialist is excited. • Euphoria: As the market achieves its peak, the financial specialist is euphoric and very certain that the market will proceed up. The Downturn • Anxiety: The market starts to plunge, producing sentiments of nervousness (Point 5). • Denial—The market keeps on falling, and the financial specialist experiences dissent with so many considerations as "It's alright, I'm in it for the long run," and "This is only a transitory misfortune," (Point 6). • Desperation and Panic—As the market cycles bring down still, sentiments of urgency and anger follow (Points 7 and 8, separately). • Surrender—Panic, in the long run, offers an approach to surrender when the financial specialist supposes "How might I have been so off-base? I cannot deal with being in the market anymore. I can't take any more misfortunes," (Point 9). The Bottom and the Recovery • Depression: While the financial specialist flounders in wretchedness (point 10), the market winds up in a sorry situation and offers a route to another bull. • Hope: As the market keeps on reinforcing, the financial specialist is confident that the market will proceed up (Point 11). • Relief: Once the market affirms it is in an uptrend, the speculator feels alleviation, however, they are as yet not sufficiently sure to contribute (Point 12). • Optimism: The financial specialist holds up until the point that they feel idealistic once more (Point 1 or frequently significantly later) before re-entering the market. As we portrayed over, this typically does not occur until the point that they have officially missed a huge bit of the up move, and their opportunity to recover misfortunes with it. Position Structure There are several trading software’s, which empowers the individuals to either structure or drive their framework by an individual or by position. Before the data is set-up in the control tables, an individual should choose which technique to utilise. The framework forms the data contrastingly relying upon the person’s decision. When the software is driven by an individual, work codes are utilised to arrange work information into gatherings. These codes are utilised to connect individual information to work information. When the software is driven by position, despite everything, work codes are utilised to make general gatherings or occupation arrangements in the association, for example, EEO (measure up to business opportunity) and pay review information.
Education
by SMPTrader
An important lesson: bad traders and investorsThere so many random people starting hedge funds & all they have to do is shadow the market and voila, you are a millionaire (this is 100% true), in a batch of thousands of people some are going to be lucky - simply a normal distribution - and get better results and end up billionaires instead of millionaires. They are certainly good at marketing and presentation all that stuff to attract dumbvestors. Alot of people that really know this business say that 95% - or more - are complete frauds. I mean, at least they are able not to lose money. The cool thing is they have alot of money, and this money is ripe for the picking. They almost always underperform indices, and bring so much cash in, I think in late 2017 they had over 800 billion usd into stocks. Bringing plenty of volatility and volume, so easy to just ride on their backs when something strats trending then they follow the momentum and push it strongly... So today, let us look first at Bill Ackman. This guy became a billionaire somehow, probably just what a random normal distribution does, and he was bullish on valeant pharmaceuticals at 200$. Now what did it look like back then? Looks like a complete bubble. He is probably one of these guys that does not believe in TA. But any way you look at it you can clearly see it lost momentum, and it looks like a bubble. There was 1 small support and that is it. The price skyrocketed, of course there is a strong possibility it just skyrockets down... What did he do? Buy "the dip" at 200$, then he refused to sell because "it cannot go lower I am sure about this" and he even BOUGHT MORE "cheap" as the thing was going down. He wanted to hold it "for the long term" but under pressure and to convince investors he had not entirely lost his mind he ended up selling at something like 10-15$. Cringe. His fortune was over 2 billion, and now he only has 1 left. He used to be called "baby Buffet". No more. People just do not understand normal distributions. Second story. "Vadim Perelman was a young hedge fund hot shot not so long ago, overseeing a portfolio in the hundreds of millions at the age of 31, hopping on corporate boards, and issuing lengthy slide presentations about his favorite stock picks. But then Perelman placed an enormous bet on a single company, Walter Investment Management." Translation: Freshly out of school nerd started with wins due to how normal distribution works. He ended up with hundreds of millions quickly. And he probably considered himself a "legend". The new Warren Buffet, the genius of finance that would reinvent trading. Let's look at the story. I cannot find the chart in trading view so it is going to be all text. Trading legend and young prodigy Vadim Perelman hedge fund was the largest shareholder of Walter Investment Management in June 2015 when the share was quoted 23$. Perelman’s U.S. stock portfolio has gone from $854 million in 2013, including the notional value of a large number of options, to $35 million in September 2016, SEC filings show. Trading legends never cut losses... THIS ACTUALLY HAPPENS IN REAL LIFE REALLY???? There are so many examples, but I had enough for now. So not be one of those. Trading is easy, seriously, but some qualities are required, such as IF you go all in on something (why?) do not let it drop 95% before getting out. Or in other words, the quality of not being a complete moron. Nothing warms my heart more than watching an arrogant fool that gets lucky and thinks he is this superhero get struck by reality and fall face first on the hard ground. If they get angry it is even better. An amazing treat. On the flip side you might get the one that is really good but starts with bad luck, but I doubt that happens often... I just cannot believe all these "common errors" of trading I keep hearing all the time... but then I see experienced educated professionals make them... what is this? Really? "Oh I cannot just open a trade and forget about it or just follow my rules" why? why? People are broken lmao. Avoid all these dumb mistakes never cutting losses not being disciplined overtrading FOMOing etc and seriously it's basically impossible not to make money trading. Maybe I'll teach a dog or a 5 years old one day. Oh I think Dan TheChartGuys daughter knows how to make money and she is 10. Not sure but I think that is what I heard. Now that the crypto bubble is over, I will miss seeing a new "legend" pop out of nowhere get a lucky streak of 3-4 winners once every 3 days, call himself the son of god himself, blow up and disappear. People that are interested in trading - I think - are less dumb than alot of the people that appear during bubbles such as crypto. In all seriousness, I hope this never changes, thousands of morons playing with hundreds of billions of dollars, booooii I'm feeling tingles as I type this, the potential to rob them is enormous. For someone addicted to charts and that learns new things every day. Luckilly I am one of those. I CANNOT WAIT for my trading week to start, see some fear, see some panic selling and buy these dips then run away with their money.
EUREX:BVFF1!Education
by MrRenev
How to trade in the Crypto Market - Trading TipsHello Crypto Family, Reading the charts and indicators is very important and helpful but without having a plan to manage your money, sooner or later you gonna lose money. It happens that you will find yourself on the wrong side of the trade and having the discipline to execute your plan (exiting the trade) is essential. “The four most dangerous words in investing are: This time it's different.” - Sir John Templeton Money Management 1) Never trade on your assumptions / be ready to change your opinion: We all like some Blockchain Projects more than others, but we are here to trade and make money. There are many interesting projects without liquidity and therefore not the best coin to trade. Never fall in Love with a Coin! Only because you think the price is very low, it doesn't mean that we could go lower / Only because we made x% up, it doesn't mean that we will reach all-time highs. Don't try to catch the falling knife, wait for the Volume and breakout. But once the confirmation is there, and it is not what you have expected, you need to change your mind very quickly and adapt, otherwise you will enter the market when others are already taking profit or when the market is crashing, you will sell your position with loses. “Everyday I assume every position I have is wrong.” – Paul Tudor Jones 2) Keep your emotions under control and never FOMO: Be aware, how much risk you are risking and what is the potential reward. Right now we don't have a reasonable Risk/Reward ratio to be invested in BTC. The safest way to trade is to stay on the sideline an wait for BTC to break the Support Line (Move Downside) or push above resistance Line. Missing on small moves isn't significant because you can always catch the wave 3. Never get emotional and invest 100% of your position, by laddering in / out, you reduce your risk of a bad entry point by having a good average price entry. And if you make a bad trade you don't lose all your money. It's like playing in multiple lotteries. “Frankly, I don’t see markets; I see risks, rewards, and money.” – Larry Hite 3) Reward yourself: If you have a successful trade, start cashing out your gains. Let's say you have made 100%, you could cash out your initial investment and leave the rest invested and play with the "house money". “Don’t focus on making money; focus on protecting what you have.” – Paul Tudor Jones
COINBASE:BTCUSDEducation
by Verethragna
Bitcoin in slight profit. Time to shift focus?The Bitcoin trade that I wrote up last week is ever so slightly in Profit and with the Inverted Head and shoulders now in it's maturity it won't be long before the conclusion of the opportunity starts to play out. Now I'd like to shift focus to Ripple (XRP) I have been long extolled the virtues of XRP by my Brother who has been hammering home the benefits of it for over a year now. For this reason alone I am duty bound to look at it as a potential long trade and consider whether it is a real buying prospect. I have to say, at this stage I can't quite see it. It has been aggressively sold since April and though I see some weak signs of a hold in this area I would need some decent signs of genuine interest to get me in to a trade. I have marked off a possible short term trade that I will possibly enter speculatively with tight stops to see if it can get through the upper line. I will keep a tentative eye open but am unwilling at to commit at this stage.
KRAKEN:XRPUSD
by DollarsNSense
What makes a good breakout trade? I have found out that the best breakout trades occur when a trader does the following things: 1. Finds an area of consolidation under and area of significant support if you are selling and or above resistance if you are buying. 2. Split your position sizing into 3rds so you would be able to enter at least three times because there is a very big chance for false breakouts. For example, lets say you see a breakout trade oppotunity and would like to trade a micro lot at .01 lot with 25 pips. Instead of placing the whole trade as a .01 lot, take it and divide it by three so you would be able to trade .003 lot at 25 pip stop loss and still risk the same amount as the .01 lot. 3. Time your trades!! I only place breakout trades when the market closes (its possible to do so when you have Oanda) because that is where I notice breakouts are more powerful and less choppy. OANDA:EURUSD
Education
by ElieTheForexTraitor
EUR-USD analysis, and the correct POSITION SIZING in ForexFor the next three weeks, I will be on vacation but before, my analysis on EUR-USD and a little lesson about opening the correct POSITION SIZING in a trade. If EUR-USD closes above the blue trendline, there will be a bullish signal with the target area at 1.1883/1.1892 and the stop loss at 1.1560/1.1565. Before click on "BUY" or "SELL" you have to decide not only the stop loss and target (as you can see in the chart above) but also the maximum loss you are willing to suffer, in the case your operation doesn't go as you have analysed. This is a fundamental aspect because you must always to put yourself in the best condition to do trading and a loss never have to give you stress and cause problems to your account. There are different ways to calculate the position size depending on the type of market. Following, you will see the calculation for the Forex market. So, I will show you how to open a proper Forex position based on your risk appetite. In such a way, even though the currency pair reaches the stop loss, this will not create any problems for your account and stress for you. I do that, by taking as an example the analysis above on EUR-USD. Let's say you buy the currency pair at 1.1730 with, as you have seen, the stop loss at 1.1560. Your maximum loss bearable is $ 200. How much do you have to invest in this trade? You obtain the position to open with this formula: Position Size = / value 1 pip Where: MAX LOSS is your maximum bearable loss you ($ 200); PIPS OF STOP is the distance in pips between the entry price and the stop loss; VALUE OF 1 PIP is the minimum value of a pip for $ 1,000 of purchase/sale of EUR-USD. For the last parameter, for calculating the value of 1 pip of a currency pair, I don't want to insert link to my or other websites. On Google, you can find several tools for getting this value. Returning to the example, the position size to open is as follows: Position Size = / 0.10 = $ 11,764 If you establish the maximum loss not with a fixed amount in dollars (or in your currency) but with a percentage, the formula varies as follows: Position Size = / value 1 pip Where CAPITAL is the amount of money in your trading account, and %OF MAX LOSS is the maximum percentage of your capital you are willing to lose in the trade. If for example, you have a capital of $ 50,000 and your maximum loss is 0.75% of your capital. The position size to open is: Position Size = / 0.10 = $ 22,058 This aspect of trading is as simple as little used and is the first step to become profitable. I hope this brief lesson help you to improve your trading. Good summer everybody!!
by TradingwDavid
1
When to add to a trading set-up/plan and when to leave it alone.It can be a very daunting task to create a trading plan/strategy that fits you without conflict. There are a lot of obstacles that inhibit the average trader from leaving a profitable trading plan or strategy as it is. Even I struggle with this which is why I have decided to publish this article. After much reflection, I have come with a few metrics you can use to determine if you should change your trading plan or not. Mental Capacity Mental Capacity, to me, is perhaps the most important aspects of trading. It easily differentiates traders that are absolutely determined to become successful and traders that are bound to become scam traders and losers (no pun intended). Mental capacity resonates itself in a traders ability to deal with traumatic trading experienced such as drawdowns and losing trades. A lot of traders don’t understand that trading is a game of probability so you have to make a lot of money when you’re right and lose a little when you’re wrong. If you make 4X the money you lose, you’ll have to lose more than 80% of the time to not be profitable. Understanding and having mental capacity allows a trader the ability to ignore irrational phobia of thinking that their strategy is not working. If your trading plan/strategy fits you mentally then you should have the mental capacity to accept all the things that can happen to you trading wise. If not, then it’s time for you to change it. Trading is a mental game, always. Objective As much as I love the mental side of trading, I do have to admit that objectives are very important in trading as well. If you’re trading a strategy that is not fulfilling your objective (based on reasonable probabilities) then it’s time to switch components of your strategy. I hate to admit this as I am a big believer in having a “Mind like water.” When it comes to trading but if you have an ever burning passionate desire to make 4X what you risk and also to follow the trend then it’s not recommended to deny yourself of this desire as it will one day influence you to give in and break your trading plan. The solution to this, in my opinion, is to take your objective and create your plan/ strategy around it. For example, if I have a goal of making at least 100 pips per 25 pips that I risk then maybe I should trade on a higher time frame while using psychological support and resistance levels. The moral of this part of the article is to exemplify the fact that any undesired occurrence a traders mental capacity can’t handle can easily be resolved by having an objective ( not having a 30% DD) and a solution (maybe I should hedge my trades or buy options) that can help you acquire that objective. The solution in return will let you know that it’s time for you to change your strategy, but if it doesn’t resolve the objective then keep it as is. Compatibility I’m going to try to keep this part simple mostly because it’s somewhat related to the objective side of this article but at the same time is a very important part to keeping and tossing your trading plan. No matter how much money you are making in trading, if you aren’t compatible with your trading plan then it will all be in vain. It isn’t logical for a trader who loves waiting to be a scalper and vice versa because when this happens it makes the trader feel that they have to change instead of the trading strategy. It has to be the other way around! Trust me, I learned this the hard way because I always got jealous of high leveraged scalpers making 1k days while I was making 2% per month if I got lucky. When I tried copying them it forced me to change into timeframes/trading strategies that I was not compatible with. My advice to any trader struggling with this is to love yourself and you’re trading because it’s your decisions and perspective that determine profitability. OANDA:EURUSD
Education
by ElieTheForexTraitor
How to trade with ESMA new regulations on leverage ?Hi everyone, Some of you may or may not know that big changes will take place on august 1st 2018 on Forex and CFDs market especially for retail clients. ESMA for European Securities and Markets Authority decided to ban binary option and apply a drastic decrease on leverage on all financial instruments including forex, CFDs and crypto. All UE regulated brokers are affected by these changes. Even non-UE brokers (I mean serious ones) are applying these changes. All clients from UE or not are affected by these changes. This a worldwide earthquake on trading planet. New rules, new attitude... how to deal with these changes ? First find below the new leverage : Major FX: 30:1 (USD, JPY, CAD, GBP, CHF) Minor FX: 20:1 (ALL OTHERS including AUD, NZD) CFDs: 20:1 Stocks: 5:1 Crypto: 2:1 Before, a trader could start trading with $100 with leverage up to 400, a micro lot (0.01) required $4 margin average. Starting august 1st a trader with a $100 account will need a required margin of $30 ON EURUSD for a micro lot (0.01). EURUSD new magins on august 1st: 0.01 lot: $30 0.1 lot: $300 1 lot: $3000 Of course this post is not dedicated to criticize this new law but to provide ideas to deal with it and continue making money. Normally I recommend using 0.01 lot per trade with a $1000 account but this rule can be adapted if we reduce drastically the number of opened positions simultaneously. For example, if you take only 1 trade a week in swing looking for 80 to 150 pips, you can obviously increase your lot size from 0.01 to 0.05 or even 0.1 for experimented traders. Selecting carefully trading opportunities The first consequence of the low leverage is the fact that you cannot open several trades simultaneously. You really need (and you won't have choice anyway) to be selective on trading ideas. Choose only opportunities with the best configurations and in which you have a really good confidence. Strategy 1: If you have a $1000 account, you can decide to keep up to 4 trades opened at the same time with a reasonable stop loss. If you risk 2% of your capital per trade , you could use 0.05 lot at $150 margin with a stop loss of 40 pips ($20). If you apply a risk/reward ratio of 2 or more then you can expect 80 pips ($40) on each trade. With this strategy you must lose 20 trades in a row ($700 loss at 40 pips stop loss) before not being able anymore to place 4 trades simultaneously at 0.05 order. You need to win 35% of your trade to be flat because of the risk/reward ration of 2 minimum. (See the attached post about risk reward ratio) Strategy 2: If you have a $1000 account, you can decide to keep only one trade opened at the same time with a reasonable stop loss and with a bigger leverage. Assuming that you risk 5% of your capital per trade , you could use 0.1 lot at $300 margin with a stop loss of 50 pips ($50). If you apply a risk/reward ratio of 2 or more then you can expect 100 pips ($100) on each trade. With this strategy you must lose 14 trades in a row ($700 loss at 50 pips stop loss) before not being able anymore to place a 0.1 order. You need to win 35% of you trade to be flat because of the risk/reward ration of 2 minimum. (See the attached post about risk reward ratio) Strategy 3: For scalpers, if you have a $1000 account, you can decide to keep only one trade opened at the same time with a reasonable stop loss and with a bigger leverage. Assuming that you risk 2.5% of your capital per trade, you could use 0.1 lot at $600 margin with a stop loss of 10 pips ($20). If you apply a risk#reward ratio of 0.5 then you can expect 5 pips profit ($100) on each trade. With this strategy you must lose 20 trades in a row ($400 loss at 10 pips stop loss) before not being able anymore to place a 0.2 lot size trades simultaneously at 0.2 lot size. Obviously you really need to get a high winning rate to stay alive. Hope you enjoyed this post. Happy trading!
Education
by Traderscope
2
How to find high probability trends on any currency pair.This is a very descriptive example on how a trader can find high probability trades that are very unlikely to reverse. The markets are full of fractals so this strategy should be good for any timeframe but I highly suggest you use these timeframes as follows. If you place trades using the 4hr, use the daily for trend (example on the chart). If you place trades using the daily time frame (recommended) use the weekly time frame for the trend by using the same exact method but on the open, high, low, and close, of the weekly charts. Please leave a lime and comment as this encourages me to create new content for you guys every Friday. Feel free to message me. FX:EURUSD
Education
by ElieTheForexTraitor
1
Three things Mark Douglas taught me. (Pt2) Risk & Money Management Risk management, in my opinion, is equal in importance to psychology because it allows your trading strategy/edge to play out by keeping you in the market equity wise. There really isn’t much to risk management other than its number one rule, never risk more than 1% per trade. Risking one percent per trade allows your trading system to take losses and have drawdowns but not enough to the point that you won’t be able to get out of it. I’m actually not a big fan of risk so I place trades using less than 1% of my capital. A lot of traders would think risking .75% per trade based off of my trading strategy is ludicrous but to me, it makes a lot of sense. As a trend follower, I take multiple small losses and few big winners that make double, triple, or quadruple, the loss. Trend following is very difficult because of the multiple small losses but definitely pays off because it lets your winners run. Big winners and small losses are definitely a trader’s best friend because it allows you to have a high risk reward ratio. If you risk $1 per trade, your goal is to make at least $4 back. If you constantly trade looking for 4x your risk all you need to do is win more than 20% of the time to be profitable. (Ex: Win 1 trade=$4 Lose 4=$4=0) .To be profitable you have to win more than 1/5 trades or 20%. With that being said, risk management gets even better when you use money management. As you can tell from the title, money management and risk management are two different things in my opinion. This wasn’t always true though. The old me would've said risk management and money management are the same exact thing but now that I know what I know now, I completely disagree. Money management to me is where you spread your risk to give yourself an even bigger edge. To illustrate, let’s look at the example shown here. According to my trading strategy my risk would be .75% of my equity on this trade but I would "spread the .75%" by taking it and dividing it into six trades instead of placing it on one. Let’s say I have $1000 in my trading account with .75% of $1k being $7.5. I would take the $7.5 and divide it into six or $1.25 per trade. My trading system would've told me to take buy limit trades at 1.66308 and 1.66815 at .005 lots (possible through Oanda) at 25 pips stop loss. Unfortunately the trades would’ve been a loss of $2.50 total or -.25% but because I'm spreading the risk I would still be able to enter four more trades. The remaining four would be a buy stop at 1.6654, 1.67068, and two at 1.67980 in anticipation of price closing at 1.68300 for us to take profit. If we were to follow our trading plan and disregarded negative psychological energy, our end profit would be as follows: -$1.25, -$1.25, +8.73, $5.90= Total profit $12.13 or 1.2% gain.
Education
by ElieTheForexTraitor
5