Introduction:
Hey!
This is bilal haider, and this blog will teach to manage your money, in forex trading .
Well, people invest money, also they know how to trade, and what to trade,
but they don't know how to manage their money . For this they hire people, who manage their accounts, at huge fees . but this system, will start building confidence in you , that you can manage your money by your own .
This is bilal haider, and this blog will teach to manage your money, in forex trading .
Well, people invest money, also they know how to trade, and what to trade,
but they don't know how to manage their money . For this they hire people, who manage their accounts, at huge fees . but this system, will start building confidence in you , that you can manage your money by your own .
Calculating Lot size:
I always tell my friends, to use H1 time frame for my all systems,
like, EMA pro, Pro Rainbow and for others as well, and suggest them, to always set 40 pips SL.
For this Money Management article, i will use this number .
How much % money you should put on RISK ?
1% to 5%
For this article, i choose, 2% .
How you calculate 2% of my money, and what the heck is this, i can't understand???
If you are thinking like that, keep on reading, ..
Useful info: 1 Standard lot EUR/USD = 10$
If you set your SL at 40 pips, you risk
Also suppose you have 10,000$ balance in your account..
40pips (stop loss) x 10 (Price per lot) = 400$
2% of 10,000 = 0.02 x 10,000 = 200$
now, divide, 200 / 400 = 0.50 lot size..
Point to be noted:
That means, if you open a trade with 0.50 lot size , and it hits SL you lose, 2% of your money
If you set your SL at 40 pips, you risk
Also suppose you have 10,000$ balance in your account..
40pips (stop loss) x 10 (Price per lot) = 400$
2% of 10,000 = 0.02 x 10,000 = 200$
now, divide, 200 / 400 = 0.50 lot size..
Point to be noted:
That means, if you open a trade with 0.50 lot size , and it hits SL you lose, 2% of your money
" ok bilal i got it, you mean, i should open 0.50 lot size trade if my balance is 10k , and 0.25 if i have 5k, and 0.14 if i have 2.5k, and 0.10 if i have 2k, and 0.05 if i have 1k "
Suggestions:
I suggest, you not to open 1 buy or sell trade of you calculated volume, 0.50 in my case.
but you should, open 5 trades of 0.10 .
and do following things..
1) Set 40 pips SL for all of the 5 trades,
2) 3 trades on fixed TP value, 20 pips, 30 pips, 40 pips
3) remaining 2 trades on Trailing stops at, 30 points, and 40 points ..
Risk management:
if you want to minimize Loss,
then don't put at 40 pips SL , but, 20 pips for first, 25 pips for 2nd, 30, 35, 40 pips SL
Try it, on demo, use your mind :)
For any questions, ask below..
Also, if you have some suggestions, can give in the comments below,..
Cool tip for you:
I wish you all the best, with your money management, and your Risk management as well
You can experiment, changing SL and increase or decrease trades, like, you can open 10 trades of 0.05 lot size each..
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