facebook  Twitter youtube  blogger

Money Management explained in a few simple words

Money Management explained in a few simple words
Money management involves a number of things and it is not to be confused with trade management. Money management is static. It deals with things like deciding the size of your margin account; deciding how much of your account you will put at risk on any one trade; deciding where to place your stop; and deciding on fixed objectives. The main purpose of money management is to save you from a disast...
Continue reading
490 Hits
0 Comments

Why Pips Don’t Matter!

On a regular basis I get questions regarding Forex Trading in general or AlgoStrats:FX like: - How many Pips do you make per month? - How many Pips does a good trader make per month? - Does your Strategy make 100 Pips a week? Additionally to that, there’s advertisements all around that promise traders 1000 pips a month or performance reports that look like this: This month trades: 27 Sep: GBP/NZD ...
Continue reading
598 Hits
0 Comments

Confidence

A few years ago I had an interesting conversation with Joe about “what makes a trader a successful trader”. We discussed this over several days because we wanted to find out how we can help struggling traders to enhance their trading. We finally came to the conclusion that “confidence” is what makes a huge difference. A trader can have a good system, good money and risk management in place, good u...
Continue reading
991 Hits
0 Comments

Trading is not scientific

I say that because trading is not an exact science. You can't do X and get Y every time. Trading does not fit the definition of science. It is not totally objective. It is as much an art as it is anything else. There is no magic formula. Trading is all about probability. It is the art of correctly applying a set of carefully thought out rules and allocating the probability of that event to result ...
Continue reading
1093 Hits
0 Comments

Over-Trading

Over-trading fits in under the topic of risk management. We are talking “risk control.” First, I would say that risk management is one of the most important things that you really need to understand. Second, you must begin to under-trade, under-trade, under-trade. Whatever you think your position ought to be, cut it at least in half. My experience with novice traders is that they trade 3 to 5 time...
Continue reading
1054 Hits
0 Comments

FOREX VS. FUTURES

What’s better to trade the currency markets? Trading Futures or Forex? This is the question I try to answer in my new video, where I briefly discuss the major differences between trading Futures and Forex from my perspective. At the end though there’s no “right” answer to that question, as it really depends on your needs.
897 Hits
0 Comments

How much to risk per Trade

How much to risk per Trade
One of the questions every trader has to think about at some point is, how much of my account should I risk per trade? A percentage? If so, what percentage? I’d love to have the right answer in my pocket for you, like "exactly 1.25% per trade/market and no more than 5% at the same time," but unfortunately, I don’t. Again I know you don’t want to waste too much time with this bo...
Continue reading
Recent Comments
Jean1975
Great post. In my humble opinion carefully managing risk with a proper position sizing and shutting down quickly the losing trades... Read More
Thursday, 12 May 2016 15:48
Marco Mayer
Thanks Jean! Unfortunately posts and videos about anything related to risk-/money-management aren't the most popular ones. So I'... Read More
Friday, 13 May 2016 02:28
1148 Hits
2 Comments

Position Sizing/Measuring Performance

About a year ago I wrote an article about  measuring performance  where I explained the concept of measuring trading performance in Rs instead of $s. Everyone who trades for a while quickly realizes that $s don't really say too much about performance. You made $10? Maybe great. You made $50.000? Maybe not so good. The question always is in relation to what? What account size does the tra...
Continue reading
921 Hits
0 Comments

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.