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This site is currently inactive as I have decided to move away from exclusively trading Forex in 2010 and as such will not be taking on new coaching clients in this area.

 



I have resumed my focus on coaching as a stock market mentor where I run a success guaranteed stock trading mentorship program

 



Additionally, you can now get access to what I consider to be the best stock options trading alert service.

 



Of course I am biased and with a success rate fluctuating between 68.2% and 72.4% it is hard not to be biased.

 



If you do want to follow along with what I am doing every day you can get access to my dail stock market report 

 



Until next time


happy trading 


Mr Phil Newton or on LinkedIn Phil Newton trader

week comm July 3rd

Natalie's picture
Another week, another month, another quarter. This is the halfway point to the year and an opportuntity to draw a line under everything that's gone before and think about making the the second half a good one. So, here's more money management to think about... If you take a trade with a 15 stop and size it to risk 1% and take off a scale of 25% the original entry size at +15 pips. By leaving the stop alone, the financial risk will have reduced by half to 1/2% If you move the stop in from 15 to 10 (a 5 pip move) then the financial risk will have reduced by 3/4 to only 1/4% If you trail the stop in from 15 to 5 (a 10 pip move) the the financial risk will have been removed to a break even trade. Taking the same trade with the same first scale at 15 and a second scale for 15% of original size at +30 pips, then with stops moved as above you have the lock/financial risk as below. Trail 0 (stop -15) = 0.05% risk Trail 5 (stop -10) = 0.15% Locked Trail 10 (stop -5) = 0.35% Locked Trail 15 (stop at 0) = 0.55% Locked With good entries located at supports and resistances allowing tight stops (i.e. 15) and space to hit reasonable first and second scale targets, it's not hard to see how a very effective strategy can be put together with some decent entries and these kinds of risk management approaches. This also leaves 60% of the opening size available to gaine much more. In each of these cases. even if the final exit was only 15 pips further out at 45 pips profit for the remaining 60%, then the total reward for the trade would be 2.35%, more than twice the original risk. It is possible to argue that simply leaving it all for 45 pips and taking 3% (giving a 3:1 ratio) would be more attractive if all the trades will go to 45 pips. BUT we live in the real world and it doesn't pan out that way. For me, I'd rather get my risks right down, get profits booking and if I get lucky on 45+ (however I work from there with scales/compounds) then those trades are icing on the cake. You don't need a couple of really big trades to make consistent money. You need a good risk management strategy to ensure all those metaphorical Nikels and Dimes keep on coming in rather than out and the big wins will take care of themselves. Last week, I didn't catch the Big trade on thursday evening, and although I did get friday, it really was only icing on the cake of a good week. All those little wins here and there using strict risk management added up to a solid week in a very dull market meaning that I didn't even need to trade Friday's moves at all and missing thrusday really didn't matter at all... The above numbers are just one example and if you play with them you will find many more. Something to play around with over the weekend perhaps?