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Riskmanagementstrategy

BASIC MONEY MANAGEMENT - LOT SIZE VS REVERSAL AND ACCOUNT SIZEWe see too many new traders trade with random lot sizes with no understanding on the impact it has on account sizes, which result in not only losses but BLOWN accounts. This post is by no means a risk or money management strategy but more so just basics on the movement of reversals and how the lot sizes impact the value of your account during this reversal. Trading with the right lot sizes allows a trader to manage their account/money when the trade goes against them. The right size allows a trader to move a range without blowing their account and without seeing their account reverse to the point of no equity. This type of trading gives traders anxiety and in return this anxiety impacts trading psychology. This then has a ripple effect and impacts your trading decisions and analysis. The example we show on the chart is an entry of SELL that reverses by 380 PIPs. This movement happened in literally 2 candles (1hour candles) , so in two hours the price from entry reversed by 380 pips. This example then shows what this equates to in monetary value dependent on lot sizes. The example shows that anyone with a £500 account trading this movement with a lot size of 0.20 would have blown their account. Lot size usage should be based on the size of your account for example; £500 size account - we will only use 0.01 size lot sizes with maximum deployed total no more than 0.05. This will allow an account to survive volatile movements. Also using stop losses ontop of this setup further strengthens the risk management. £1000 size account - we will use 0.02 lot sizes with maximum deployed total no more then 0.10 any given time. £2000 size account - we will use 0.03 lot sizes with maximum deployed total no more then 0.30 any given time. £5000 size account - we will use 0.06 sizes with maximum deployed total no more then 0.50 any given time. Basically 0.10 for every £!000, as the total deployed usage allows us enough flexibility of movement on the chart and then using stop losses ontop of this, gives us further control of our money management. We hope this quick basic insight helps some of the newbies better manage their lot size usage. Please like, comment and follow us to support our work, we really appreciate it! GoldView
OANDA:XAUUSDEducation
by Goldviewfx
16
XRP/USD NO NEED TO RUSHAnalysis: Right now patience is the key on the market, there is no need for huge spikes to the upside. A constantly growing trend will do the job if a lot of people are interested of buying. A lot of analyst posting about 50/50 chances about the price to go up or down, it's always the case, but we need to be 1 step ahead before the price action. If you wait until you see a huge price rise, you miss the low risk-reward opportunities from buying now safely with a stop loss of 1.10$, and you will start buying at 1.6 or even higher to catch the rise and you will have a nonsense risk reward ratio on the trade. As I shared my chart about my last long position you can see that I entered at the bottom of the correction from 1.2$, so our stop loss is at 1.10 in case of a sudden flash crash. I am not speaking about targets right now until we will go higher than the previous high. If it takes a lot of time to get to that top again, it will offers us higher price targets as well. Consider to join our community to get more of this kind for Free. community.protradersnetwork.com #forextrader #forex #forextrading #forexsignals #forexlifestyle #trading #money #cryptocurrency #trader #bitcoin #forexmarket #forexlife #technicalanalysis #stockmarket #forexanalysis #forexmentor #daytrading #forexgroup
Long
by tmsarn
Has Bitcoin found its bottom? How to properly swing trade. Hello Everyone, This is a chart I made a few days ago as bitcoin was approaching 44k. As always. the first step in my analysis is identifying support and resistances on daily chart and looking for the formation of a bullish/bearish pattern to engage in a buying or selling strategy. Next, I look at price action and see if the selling momentum is waning off to support any buillish divergence I see on the chart. As we can see, bitcoin is in a double bottom formation. Now, how do you properly trade this without getting burned? You average in. Averaging in is a way to ensure profit with minimizing your risk. A first buy would be 25% of portfolio at 44.5k (I always buy a bit above support so my limit order fills) which is right above support. A stop loss would need to be just below 43.3k (the previous lowest low). This is about a 3% loss but a total of .07% to your portfolio. If the trade fails you can walk away taking a very small loss and you get lower prices in return. A second buy would need to be confirmed by indicators on a 4 hour to daily timeframe with shorter term timeframes showing bullish behavior as well. A good buy would be around 51-52k depending on the close on a 4 hour and daily candle and I would also move my previous stop loss up depending where the daily candle opened. At this point i would do another 25-40% buy depending on how each chart looks. A third and fourth buy would be constituted by closes above the next resistance levels and how bullish or bearish each timeframe looks. OVerall, averaging in is a great way to ensure big wins with taking minimum losses. Let your winners win and keep your losers small. Be patient, find confirmation, and utilize risk management strategies to help you become a better trader. Please give me a thumbs up if you found this useful and good luck trading!
COINBASE:BTCUSD
by RomanXIV
Stellar Lumens XLM Potential 14:1 Setup Stellar is an entire ecosystem with expanding potential. Here is something I have positioned in for now. TRADING IS NOT SUITABLE FOR EVERYONE. If you don't know what you're doing... TRADING CAN CAUSE YOU TO COMPLETE LOSE ALL OF YOUR MONEY. Even if you "know what you're doing" you can still experience expensive LOSSES and lessons. You could use a practice account and trade with leverage. Feel free to follow me on tradingview for more markups.
BINANCE:XLMUSDLong
by ZacharyHogan
5
AUDUSD should pull back lowerAudusd is caught in overall channelling. Both buyers and sellers are compelling strong, while the overall channel is in sellers territory. It is hard to know which side should continue trending move, but we can still trade it well. We are looking this trade as potential if price broke through first support level at price 0.72363. Sellers might push price lower to our first target at 0.71612. First target is very important for buyers too, so we will be looking this very closely. That means, we have to follow lower timeframe momentum too, when one side will made a breaking/ bouncing decision. Sellers next target is at 0.70831. Setting up Stop Loss to break even and following it lower... If price will bounce, we have to wait for more patterns and fact data. We hope this was helpful. Good trading Elite traders. ELitefxacademy
Short
by EliteFxAcademy
20 Days Trading CalculatorThis is my 20 Days trading calculator , i will share it for free..😊 Forex trading it's very simple, you just need to be content with small steps. That's all trading is.😊 Small steps that you take every day so when you look back down the road it all adds up and you know you covered some distance. It took me a long time to accept that, but it's true.😊 If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money. 😊 You need to have patience.😊
by Ghost_Trader_SA
Risk management helps with many psychological issues in tradingLet’s also talk about another so very important, and often undervalued part of risk management. Risk management really does help me to stay emotionally stable during trading. Just think about it: If I place a trade with a 30% risk and I lose it, it will hurt so much, and it will allow my negative sides, my revenge nature to come out and start dominating. I will be stressed, I will not sleep well if this trade will stay overnight. And even if I win, I will be emotionally and mentally tired, I will most likely not be able to continue trading in a normal state of my mind and emotion. The next thing is not so obvious, but if you have bad and not consistent risk management, you will NOT TRUST YOURSELF. Can you imagine how destructive it is on a subconscious level, how much stress it causes? You start your trading day and deep inside you know you can do many bad things with your account because you know how often you just follow an impulsive behavior, and how often you revenge trade. You know it can be so bad you can actually blow your account in 1 day, as it happened before. Even if you made a self promise to trade according to your plan. And on the contrary, what happens if I regularly, consistently risk 0.25-1% of an account. Many GOOD things will happen, both obvious and not so obvious. First of all, after entering a trade, I will most likely be able to stay relatively calm - I know if I lose, I’ll lose only 0.25-1%. I know I can trust myself and I will not move or remove my stop loss. I'm protected. It will help me to be pleasantly curious about how my trade will develop. If it goes my way, I will be naturally glad it was good, but I will not fall into euphoria and become over-excited, because I risked only 1% and my gain will be 1-2% only. That's very nice of course, but not too much to bring me to a state of euphoria. If it goes against me, I will allow it to do so and hit my SL. And after it does so, I will then realize that it’s totally fine to lose a trade. I can lose even 10 of them in a row, and I will still have 90% of my account ready to trade the next day, next week, next month, and next year. I believe good risk management lets you feel you DO control at least something in your trading, you will feel you can allow yourself to be mistaken about the trades you take. That's why I think we should not concentrate on the ways of eliminating overtrading, stress during trading, emotional trading, fear, and so on. Instead, we should focus on good risk management. I will post more about practical ways of improving risk management.
UEducation
by Yelli_trades
1
GJ 120 pips Sells BreakdownPrice broke below the support we highlighted, however as there was no lower wick on the 1h breakout candle, price had no clear range to move down, so instead of moving to the lower timeframes to look for selling confirmations, I stayed on the 1h timeframe and decided to look for a break and retest setup, as it was not on a lower timeframe my confidence for this trade was pretty good. As soon as we tapped into the broken support zone, I took an entry with half of my usual risk, stops were above the previous candle and my TP was highlighted on the chart. Profits were taken at each of the support zones as we tapped into them, this lowered our risk and secured profits. When we hit our final target, we removed our TP and let 10% of the trade run, the target for this was 135.887, as this was a possible rejection zone and also 120 pips profit. This target was also hit before price formed support to continue back up.
Education
by mcrhf_fx
EJ Analysis 04/10/2020 -- UpdateI had already highlighted that for buys to be valid, price needed to break resistance and form a support. Price did exactly this and as support was formed, I looked for confirmations to enter buys. When the bullish 15m candle broke the high of the previous 15m candle which was our formation of support, I entered the trade. My stops were below the current 30m candle and I secured profits and left stops at BE when the zone highlighted as a potential barrier for price to break through was tapped. I left half of my position open and closed 90% of that at the 100 pip mark, with my final runner eventually getting stopped out at 98 pips profit. This is an example of trailing stop loss, every so often I moved my SL further into profit following market structure. The risk reward on this trade was 18.36 and price moved beautifully with no bumps along the way.
Long
by mcrhf_fx
Importance of Risk Management - let's talk about it againIntroduction We all hear from everywhere about risk management. They all say the same: “It’s important, it will help you to protect your capital, etc., etc.” But today I wanted to talk to myself about risk management in more detail. And I’m sure I will have a much better understanding of practical risk management in forex after this - I will talk through its psychological aspects, about RM role as the main principle of trading. I will do it in “talking to myself” format to remind myself in the first place about how important risk management it. Don’t be fooled by the simplicity of risk management. Unfortunately, risk management in FX is too simple. Dangerously simple I would say. In its basic form, good risk management means risking 0.25%-1% of your account per one trade. That’s it. Just do that and most likely you will have an unbreakable account for at least several months. Yes, of course, you can have a drawdown due to emotional trading or revenge trading or whatsoever. But because you will have good risk management, I will have so much time to stop trading emotionally, I can even take 10 revenge trade or 10 absolutely random stupid trades - and your capital will still be in place, even if you will lose every and each of these 20 trades. I ask myself the question - how do people blow their accounts? Very often it happens in 1-5 days of bad, emotional trading, even if the whole months before was good. I’m talking from my experience though, and I don’t know - maybe everyone else is good as their risk management. So why really it happens? In the first place because of bad risk management. Not because of the strategy, not because of the market acting randomly and not in my favor. Because I don’t want to have a simple yet powerful rule of risking 0.25-1% per trade. I start to complicate things and want to risk 5-20% at first, to gain some profits, and only THEN I want to implement good RM. Theoretically, it’s possible, yes, but in reality, I lose my mind and blow my account. So don’t be fooled by the simplicity of RM - because it’s not easy. Because it’s not easy to control yourself while facing a possibility of doubling your account in 1 day and to stay calm and even indifferent to it. Always remember, Risk Management is the #1 rule, you can't control the market, but you can control your risk management. Stay calm and risk 1%. Trading is a survival game. RM is the foundation of any strategy, risk management is the most important part of any strategy and step #1. Stay calm and risk 1%. Jesse Livermore said: "If you cannot sleep because of your stock market position (you are weak), then you have gone too far. Reduce your positions to the sleeping level." Stay calm and risk 1%.
OANDA:XAUUSDEducation
by Yelli_trades
1
How to not lose Money and be smart in Risk ManagementIt's complex code but great if you want to add on risk-free. If you have started a successful Position and wish to add on without risking losing any Money this Formula is for you! Please link my Work and be credible, we help each other in this Community! :) Formula: (Current Price/ First Position Entrance Price) = Positive Value AND Additional Entry DO ((CP/FPEP)-1)/2 = Maximum Risk Tolerance. (MRT) FPEP*(MRT+1)= Risk-Free Stop Loss Price for Add On(RFSLP) ( RFSLP is optional Info) (First Position Order in USDT * MRT) > (Second Position Oder in USDT * Number C) Execute Additional Order Number C = (Additional Stop Loss Price/ Entry Price) -1 = Number B √(NumberB)² = Number C First Position Entrance Price = Entry Price of First Position Positive Value & Additional Entry are Boolean Functions Number C is the Percentage you will set at Risk for the additional Position
BITSTAMP:BTCUSDEducation
by UnknownUnicorn5507594
3
NVX Bulls Hunting +100%Novonix Limited (ASX: NVX) is an integrated developer and supplier of high-performance materials, equipment and services for the global lithium-ion battery industry with operations in the USA and Canada and sales in more than 14 countries. Bulls Hunting +100% Huge Fractal Bullish Pennant + Targets 1.925 & 2.800 From point of break Fib Extension Targets - (-0.272 & -0.618) looking achievable and lining up to Fractal Target Regions Market Structure forming within Pennant - Higher Low and Lower High indicating squeeze Fib Retracement - Huge bounce off the .5 Golden Pocket Level MACD - Indecisive oscillation indicating squeeze CCI - Still trending up and no signs of Divergence on the Daily Bollinger Band - We have been riding the 20 MA since April 24th Daily Resistance - 3 Touches on Daily Resistance, "4th Touch" incoming? Depending on your "Risk Management" & "Entry/Exit Strat" there are 2 entries. Point of Break/ Bottom trend of the Pennant. These Ideas are NOT 'Financial Advice'!. Scenarios are based off a mixture of TA and Fundamentals current at the time. All IMO GLTAH. Happy Hunting!!!
ASX:NVXLong
by Trader_Johnni
3