First we congratulate. You have been studying Forex School module and
now come to the last grade of school. Perhaps many of you think what
else I can still learn. I have been studying the technical and
fundamental analysis. Also various practical Sciences other forex since
Walking Lamb class. What else?
Right you have studied so much analysis and trading techniques. And now we just stay doing the finishing touches of Our trading. But it is precisely this very important finishing touches. In fact forex has many factors and variables that shouldn't be there is to miss a single one. If there's one factor that You ignore, say "X" factor, then it could be a whole building your trading is going to collapse because the X. So, check out Fox Hunting lessons here carefully because here we started to get into the practical side of the scoop yet in forex more
macro. OK, Our first lesson is what is referred to as Money Management. If Forex is a business, then money management is a determining factor in whether Your business purpose is business class "the stall" or "business professional" which is also run by a professional. Isn't the difference between business class and professional, there are stalls on governance ?
Let's compare between a grocery store with a supermarket. Equally selling basic food, but what differentiates the two? Of course supermarkets managed a neat management and relying on a good system. Not so with a regular grocery store when their owners entered the wind and could not come to his shop just then the store must be closed. And which is more successful? Grocery store or supermarket? Yes of course supermarkets. So, don't do business with the model stalls. But start with the pros!
Do not trade forex also with model master grocery stalls, but run with the model of a supermarket. And this is the decisive factor in the forex is a so-called with money management. Without money management, perhaps you will benefit in the short term, but not in the long run.
Money management in forex is a set of more or less rule that is integrated in a trading system as to how you control your finances during trading. Of course it is absolute you have. Practical, money management concern the following matters:
Right you have studied so much analysis and trading techniques. And now we just stay doing the finishing touches of Our trading. But it is precisely this very important finishing touches. In fact forex has many factors and variables that shouldn't be there is to miss a single one. If there's one factor that You ignore, say "X" factor, then it could be a whole building your trading is going to collapse because the X. So, check out Fox Hunting lessons here carefully because here we started to get into the practical side of the scoop yet in forex more
macro. OK, Our first lesson is what is referred to as Money Management. If Forex is a business, then money management is a determining factor in whether Your business purpose is business class "the stall" or "business professional" which is also run by a professional. Isn't the difference between business class and professional, there are stalls on governance ?
Let's compare between a grocery store with a supermarket. Equally selling basic food, but what differentiates the two? Of course supermarkets managed a neat management and relying on a good system. Not so with a regular grocery store when their owners entered the wind and could not come to his shop just then the store must be closed. And which is more successful? Grocery store or supermarket? Yes of course supermarkets. So, don't do business with the model stalls. But start with the pros!
Do not trade forex also with model master grocery stalls, but run with the model of a supermarket. And this is the decisive factor in the forex is a so-called with money management. Without money management, perhaps you will benefit in the short term, but not in the long run.
Money management in forex is a set of more or less rule that is integrated in a trading system as to how you control your finances during trading. Of course it is absolute you have. Practical, money management concern the following matters:
Initial Margins and Margin is Added (if applicable).
Big risk per transaction are willing You responsibility.
Maximum Drawdown
Risk to Reward Ratio
1. Initial Margin & Margin Added
Initial margin is the initial capital of which you want to setorkan on brokers to trade. While the margins added are additional capital that you may add to Your trading/maintain the position that terfloating when
in the future. Of the two it can be seen that money management begins before you even trade and open your position first. Just as in other businesses, capital play an important role in your trading future. Those who trade with capital $ 5000 of course different ways of trading with a capitalization of $ 500
. Some brokers are indeed applying the minimum account opening are very cheap. Even in the Capital Gain itself a minimum opening forex account is just $ 250. Very small indeed. However, this does not mean we recommend that you trade with minimal capital. However small capital demanding accuracy and patience in opening a position along with the risk that you should be the responsibility of course greater.
Take the example of the foregoing, if you open your forex account is $ 250. Then by buying 1 lot GBPUSD at 1.9700 price. Thus the margin collateral perlotnya is $ 197. Then the rest of your funds is now a $ 250-$ 199 = $ 53. Now $ 53 this is the funds that you have to defend Your position.
movement
If a few hours after you open a BUY position in the price drops to 1.9700 1.9647 (down 53 points from your starting position), then the Margin Call will occur. Your position will be closed automatically by the system due to lack of collateral. In these circumstances you should bear the loss as much as 53 points or the value is equal to 53 dollars.
Unfortunately, if after the price fell to 1.9647 a few days later price instead soared high to 1.9800. Of course if you are not experiencing a margin call before then you will earn a profit of 100 Dollars per lotnya. Dream tinggalah dream. Due to lack of capital, your profit opportunity turned into a nightmare called margin call.
It need not happen If for example you start trading with modalh $ 1000. With 1 lot buy position opening at 1.9700 and then the price drops to 1.9647 then you still have the rest of the Fund as much as $ 750 Dollar again. This means that if the price drops to 1.8897 that margin call occurs. Something very difficult to happen in a few days the movement for GBP (and other currencies)
Now from here you understand the difference between trade with minimal capital and trade with a capital not enough? However capital cannot be lied to. Without enough capital, for a beginner in forex, it is just go to war without preparing the Defense enough.
And then if I can I start trading with capital limited for example $ 250 and gain profit?
Can! But it takes careful analysis and extra patience for you. In the example case above, then of course you have to be patient enough to wait for further price falls below the level of 1.97 to evade MC on your account. It is indeed easy-easily distress. Even for a professional though. The problem is it possible after the price reaches the level of 1.9700 she will continue down to 1.9650? Or lest after down to 1.9700 then prices will soon surged rose to 1.9800 and thus I lost the opportunity of gaining a profit. Need extra patience and the game very closely. Little Miss bubarlah so
the whole thing. Well than you stress due to lack of capital and margin call threatened indeed advisable to open up trade with sufficient capital. How much is it? If you only open 1 lot every time trade and will not open a new position until the profit reaches 1 lot or touching Your stop loss, then it is advisable to start with a capital of $ 1000. If you wish to open 2 lots in a single transaction then lived at times right 2 to $ 2000. Simple isn't it?
With sufficient funds, you have a little freedom to do maneuvers in your trading and reduce the psychological burden due to lack of capital.
Initial margin is the initial capital of which you want to setorkan on brokers to trade. While the margins added are additional capital that you may add to Your trading/maintain the position that terfloating when
in the future. Of the two it can be seen that money management begins before you even trade and open your position first. Just as in other businesses, capital play an important role in your trading future. Those who trade with capital $ 5000 of course different ways of trading with a capitalization of $ 500
. Some brokers are indeed applying the minimum account opening are very cheap. Even in the Capital Gain itself a minimum opening forex account is just $ 250. Very small indeed. However, this does not mean we recommend that you trade with minimal capital. However small capital demanding accuracy and patience in opening a position along with the risk that you should be the responsibility of course greater.
Take the example of the foregoing, if you open your forex account is $ 250. Then by buying 1 lot GBPUSD at 1.9700 price. Thus the margin collateral perlotnya is $ 197. Then the rest of your funds is now a $ 250-$ 199 = $ 53. Now $ 53 this is the funds that you have to defend Your position.
movement
If a few hours after you open a BUY position in the price drops to 1.9700 1.9647 (down 53 points from your starting position), then the Margin Call will occur. Your position will be closed automatically by the system due to lack of collateral. In these circumstances you should bear the loss as much as 53 points or the value is equal to 53 dollars.
Unfortunately, if after the price fell to 1.9647 a few days later price instead soared high to 1.9800. Of course if you are not experiencing a margin call before then you will earn a profit of 100 Dollars per lotnya. Dream tinggalah dream. Due to lack of capital, your profit opportunity turned into a nightmare called margin call.
It need not happen If for example you start trading with modalh $ 1000. With 1 lot buy position opening at 1.9700 and then the price drops to 1.9647 then you still have the rest of the Fund as much as $ 750 Dollar again. This means that if the price drops to 1.8897 that margin call occurs. Something very difficult to happen in a few days the movement for GBP (and other currencies)
Now from here you understand the difference between trade with minimal capital and trade with a capital not enough? However capital cannot be lied to. Without enough capital, for a beginner in forex, it is just go to war without preparing the Defense enough.
And then if I can I start trading with capital limited for example $ 250 and gain profit?
Can! But it takes careful analysis and extra patience for you. In the example case above, then of course you have to be patient enough to wait for further price falls below the level of 1.97 to evade MC on your account. It is indeed easy-easily distress. Even for a professional though. The problem is it possible after the price reaches the level of 1.9700 she will continue down to 1.9650? Or lest after down to 1.9700 then prices will soon surged rose to 1.9800 and thus I lost the opportunity of gaining a profit. Need extra patience and the game very closely. Little Miss bubarlah so
the whole thing. Well than you stress due to lack of capital and margin call threatened indeed advisable to open up trade with sufficient capital. How much is it? If you only open 1 lot every time trade and will not open a new position until the profit reaches 1 lot or touching Your stop loss, then it is advisable to start with a capital of $ 1000. If you wish to open 2 lots in a single transaction then lived at times right 2 to $ 2000. Simple isn't it?
With sufficient funds, you have a little freedom to do maneuvers in your trading and reduce the psychological burden due to lack of capital.
So, plan well how do you trade in the future. In the demo account you
usually given virtual funds of $ 2000 for trade. Often those who try the
demo account earns a hefty profit when they try it on a real account
boro-boro profit, existing funds directly lost due to a big loss. The
problem is where? The most common difference is their initial capital on
real account turned out to be not the same as the funds provided on a
virtual account. Those who are not aware of this then stuck to their
fortune with reason complain anyway on a demo account they already
profit. Then they start trading them with just $ 500! Yes of course a
loss!! The magnitude of the prisoner who owned $ 2000 with $ 500 of
course different. Ah what a naif
About the margin added, some people prefer to deposit their margin by the amount of innitial sparingly on the grounds that if their account later threatened a margin call then they can add funds (injection term) to hold it. Yes-may be only. Legitimate and legal
kok. Only in this case there are several factors you need to consider:
the time between depositing funds to effectively go into your account is usually 1 to 2 days. Consider with the Cook do not get a margin call occurs in 2 days. So do injection away day to be safe.
For those who are fond of injection, you should know the extent of where you want to stop doing the injection. This is to prevent the occurrence of damage due to uncontrolled you use any money that is in the wallet for injection. We have already discussed in Our early lessons that there should be a limit where we stopped because apparently the loss is too great with a variety of factors that are not too difficult/corrected.
Consider also the cost of inter-bank transfers abroad that magnitude sometimes can reach 20 dollars. Yeah okay it costs.
Whether at least the possibility of profit can be achieved if you perform injection?
Well if you are willing to endure the above factors, it is not a problem if the injection is done. As long as it is still within the limits of the investment control and opens the opportunity to gain profit, do.
About the margin added, some people prefer to deposit their margin by the amount of innitial sparingly on the grounds that if their account later threatened a margin call then they can add funds (injection term) to hold it. Yes-may be only. Legitimate and legal
kok. Only in this case there are several factors you need to consider:
the time between depositing funds to effectively go into your account is usually 1 to 2 days. Consider with the Cook do not get a margin call occurs in 2 days. So do injection away day to be safe.
For those who are fond of injection, you should know the extent of where you want to stop doing the injection. This is to prevent the occurrence of damage due to uncontrolled you use any money that is in the wallet for injection. We have already discussed in Our early lessons that there should be a limit where we stopped because apparently the loss is too great with a variety of factors that are not too difficult/corrected.
Consider also the cost of inter-bank transfers abroad that magnitude sometimes can reach 20 dollars. Yeah okay it costs.
Whether at least the possibility of profit can be achieved if you perform injection?
Well if you are willing to endure the above factors, it is not a problem if the injection is done. As long as it is still within the limits of the investment control and opens the opportunity to gain profit, do.
2. The magnitude of the Risk per Trade you're willing to Risk
Responsibilities per trade means that when once you open position, how much loss you want to limit liability if our position opposite to the market? In the future this will be related to how you build a trading system.
However in every transaction we must realize that Our analysis is not always true. Though it is true but can also time frame that we use is incorrect. This means that if we are to predict price rises in the next 2 hours turns out a new increment occurs after 2 days later. Or even not going up at all until we experience the loss.
Obstacles faced upstart was often we are not willing to say that we are wrong and close the position of our loss. Thus, we wait until the price turned back that either when the occurrence. May turn around. But the matter wait prices turned around as we expect often become the times full of frustration. Sometimes it could be a month. More worse the price never came back in time for the 6 months.
The intent of this point is: Stop Loss is important. And it is a part of money management. Without it then Our trading as a vehicle without brakes. you can ride as fast as you'd like but there comes a time where we want to stop isn't it?
Responsibilities per trade means that when once you open position, how much loss you want to limit liability if our position opposite to the market? In the future this will be related to how you build a trading system.
However in every transaction we must realize that Our analysis is not always true. Though it is true but can also time frame that we use is incorrect. This means that if we are to predict price rises in the next 2 hours turns out a new increment occurs after 2 days later. Or even not going up at all until we experience the loss.
Obstacles faced upstart was often we are not willing to say that we are wrong and close the position of our loss. Thus, we wait until the price turned back that either when the occurrence. May turn around. But the matter wait prices turned around as we expect often become the times full of frustration. Sometimes it could be a month. More worse the price never came back in time for the 6 months.
The intent of this point is: Stop Loss is important. And it is a part of money management. Without it then Our trading as a vehicle without brakes. you can ride as fast as you'd like but there comes a time where we want to stop isn't it?
3. Maximum Drawdown
is the maximum drawdown is how the magnitude of the loss in a row that may occur in your trading. Let's begin with a parable: Let's say we have a trading system that is able to provide accuracy of 70% in profit every month. This means that in one month then chances are We gaining profit from trading model we have is 70% and 30% of other losses. Or in 100 transactions, then 70 times the position of the US Open is a good thing and 30 other remedies. Pretty good isn't it?
But that alone is not enough. Money management determine here. How when we experienced a loss that is 30 times that in successive takes part? So from the first trade to trade to thirty we experience loss and then trade it to 31 to 100 profit We earn. Now the problem is whether the funds remaining after the trade to 30 still sufficient for transactions in trade to 31 and so on? This is what is meant by drawdown. How the magnitude of the maximum drawdown might happen?
There may be among you who said: "why don't I might experience a loss of 30 times in a row!" Why not? Aren't we not gods? Or do not need 30 times 10 times alone may already make us think over and over again with Our trading system.
OK, back to the case of 30 times the loss in a row it. So what is the solution? The solution there are a number of ways:
Improve your trading system so that it is no longer a 70:30 for example to 90:10.
It looks indeed very good isn't it? But this is clearly not easy. Have a system that is able to predict price movements of 90 per cent accurate certainly takes a brief not otherwise want we say many years. Yes this is indeed the best theoretical solution but realistically it's difficult.
Solution 1: Enlarge
capital
well this is still more likely than with the first solution. Capital increase then we have a bigger buffer to hold your loss on aggregate. Of course the open number of lots must be fixed and must not be incremented in each transaction. But the obstacle here is when we have limited funds. Under such circumstances, we must go back to the first or third solutions solution below.
Solution 2: minimize the loss per transaction
well this simple solution and it's more acceptable. That is to say if We had been using Let's say 10% of Our funds for the transaction that is to determine the magnitude of the Stop Loss then we need it be for example 5%. Here's why that is, if you use 10% with a capital of 1000 it means that Your stop loss magnitude of 100 points (1000 x 10% = 100) whereas when using 5% then Your stop loss magnitude of 50
points. Let's see the example following this case. Let's say we use capital for $ 1000 and only opening position as much as 1 lot each time transactions. Let's see how the comparison when we experience a drawdown by as much as 30 times (hegh ... drawdown 30 times does really make us sink. Even I who wrote it cannot imagine when it befalls me. Luckily had never happened to me hehehe:)
is the maximum drawdown is how the magnitude of the loss in a row that may occur in your trading. Let's begin with a parable: Let's say we have a trading system that is able to provide accuracy of 70% in profit every month. This means that in one month then chances are We gaining profit from trading model we have is 70% and 30% of other losses. Or in 100 transactions, then 70 times the position of the US Open is a good thing and 30 other remedies. Pretty good isn't it?
But that alone is not enough. Money management determine here. How when we experienced a loss that is 30 times that in successive takes part? So from the first trade to trade to thirty we experience loss and then trade it to 31 to 100 profit We earn. Now the problem is whether the funds remaining after the trade to 30 still sufficient for transactions in trade to 31 and so on? This is what is meant by drawdown. How the magnitude of the maximum drawdown might happen?
There may be among you who said: "why don't I might experience a loss of 30 times in a row!" Why not? Aren't we not gods? Or do not need 30 times 10 times alone may already make us think over and over again with Our trading system.
OK, back to the case of 30 times the loss in a row it. So what is the solution? The solution there are a number of ways:
Improve your trading system so that it is no longer a 70:30 for example to 90:10.
It looks indeed very good isn't it? But this is clearly not easy. Have a system that is able to predict price movements of 90 per cent accurate certainly takes a brief not otherwise want we say many years. Yes this is indeed the best theoretical solution but realistically it's difficult.
Solution 1: Enlarge
capital
well this is still more likely than with the first solution. Capital increase then we have a bigger buffer to hold your loss on aggregate. Of course the open number of lots must be fixed and must not be incremented in each transaction. But the obstacle here is when we have limited funds. Under such circumstances, we must go back to the first or third solutions solution below.
Solution 2: minimize the loss per transaction
well this simple solution and it's more acceptable. That is to say if We had been using Let's say 10% of Our funds for the transaction that is to determine the magnitude of the Stop Loss then we need it be for example 5%. Here's why that is, if you use 10% with a capital of 1000 it means that Your stop loss magnitude of 100 points (1000 x 10% = 100) whereas when using 5% then Your stop loss magnitude of 50
points. Let's see the example following this case. Let's say we use capital for $ 1000 and only opening position as much as 1 lot each time transactions. Let's see how the comparison when we experience a drawdown by as much as 30 times (hegh ... drawdown 30 times does really make us sink. Even I who wrote it cannot imagine when it befalls me. Luckily had never happened to me hehehe:)
|
Transaction
|
Total Equity ($)
|
10% dari total Equity ($)
|
Total Equity
|
5% dari total Equity
|
|
1.
|
1000
|
100
|
1000
|
50
|
|
2.
|
900
|
90
|
950
|
48
|
|
3.
|
810
|
81
|
903
|
45
|
|
4.
|
729
|
73
|
857
|
43
|
|
5.
|
656
|
66
|
815
|
41
|
|
6.
|
590
|
59
|
774
|
39
|
|
7.
|
531
|
53
|
735
|
37
|
|
8.
|
478
|
48
|
698
|
35
|
|
9.
|
430
|
43
|
663
|
33
|
|
10.
|
387
|
39
|
630
|
32
|
|
11.
|
349
|
35
|
599
|
30
|
|
12.
|
314
|
31
|
569
|
28
|
|
13.
|
282
|
28
|
540
|
27
|
|
14.
|
254
|
25
|
513
|
26
|
|
15.
|
229
|
23
|
488
|
24
|
|
16.
|
206
|
21
|
463
|
23
|
|
17.
|
185
|
19
|
440
|
22
|
|
18.
|
167
|
17
|
418
|
21
|
|
19.
|
150
|
15
|
397
|
20
|
|
20.
|
135
|
14
|
377
|
19
|
|
21.
|
122
|
12
|
358
|
18
|
|
22.
|
109
|
11
|
341
|
17
|
|
23.
|
98
|
10
|
324
|
16
|
|
24.
|
89
|
9
|
307
|
15
|
|
25.
|
80
|
8
|
292
|
15
|
|
26.
|
72
|
7
|
277
|
14
|
|
27.
|
65
|
6
|
264
|
13
|
|
28.
|
58
|
6
|
250
|
13
|
|
29.
|
52
|
5
|
238
|
12
|
|
30.
|
47
|
5
|
226
|
11 |
Note that on the drawdown to 30, the remaining funds by using 10% of the
total capital then left only by 47 $. While using the 5% left 225 $. 5
different times! With the remaining funds of $ 47, what can we do? Even
to buy AUDUSD by as much as 1 lot else cannot. The injection can only
. Thus the conclusion the smaller percentage of capital used the more secure trading We would. But of course there are constraints that you need to go through to be able to achieve such a small percentage of it. Among them are can You trade with a Stop Loss narrower than usual? Well this needs to be considered more.
And then what percentage of the best? Some professional traders say the best quantity is below than 2%! So 5% above still is too large indeed. With 2% If you have a capital of $ 1000 then the Stop Loss you need to shift to a mere 20 points only. Very small for a Swing Trader. But it is the correct percentage. This means that if you want to play swing then use larger funds. Remember, the capital could not be lied to.
4. Risk to Reward Ratio
Risk to reward ratio is a comparison between the risk you take with the advantages that accrue each time you open a position. In practice this will translate later on how the big points and Stop Loss Limit that you use each time a position taken.
Novice traders frequently determine the quantity Limit them but not at all using a Stop Loss. The reason: If using Stop Loss and Limit, more often his Stop Loss touched so often lose out. So finally most beginners trade by using the Stop-Loss Limit but forget them.
Well this so classic symptoms that occur nearly around the novice trader. In fact Our only legitimate trade in this way. The positive side of trading like this is our moral will is getting better from day to day because every position taken more profit and never loss even
. But the risk to reward ratio, it does actually harm the trader himself. Let's say the Limit taken is as much as 30 points. By not placing a Stop Loss then the comparison advantage and risk being 30: ~ aka 30 points as opposed to an infinite loop. This is because when the risk is really terrealisasi then it means all funds You will be exhausted due to the limitation of the risk itself is
a Margin Call. The ratio such as this really does not make sense. From 100 times we Transact and 99 times we win with just a one time transaction we experience a fatal error on capital gains and then the rest of Us vanished! The forex world is full of graves of the novice trader model like this. Who want to catch up? HIHIHI, isn't scaring lho, this interests You it shall be understood that the trade that there is a risk that needs to be controlled.
Well by doing so it is important to set the Risk to Reward Ration You correctly. So forget about trade without a Stop Loss! If in your trading Stop Loss You frequently touched then maybe you need to reset the trading system and determination of Stop-Loss and limit you. Bottom line, don't blame the presence of Stop Loss when your position terlikuidasi. The existence of Stop Loss here is to limit your losses and not to membankrutkan
with you. So, what is the comparative Risk to Reward good? Of course the bigger the reward and the less risk is a most excellent choice. Consider the following case examples:
If you determine Your Risk is 30 points while Your Reward is 60 points then with a capital of $ 1000 and there is 1 lot only open positions each time the transaction. Let's say in 50 times your transactions experienced loss as much as 30 times profit 20 times and then at the end of your transaction to-50 you still accounting for profit even though the number of transactions more loss than profit:
Note Although you more experienced loss of 50 transactions, but in the aggregate the financial condition of your trading remains the profit of 300 Dollars! Isn't this is the remarkable thing? At the end of the transaction, the funds at our disposal has reached 1300 Dollar from the previous 1000
dollars. This might look simple. However, many traders missed it and leads to not terencananya a trading well. As a result the Yes of course loss awaits. Loss, loss and eventual Total Loss! See you at the next class.
. Thus the conclusion the smaller percentage of capital used the more secure trading We would. But of course there are constraints that you need to go through to be able to achieve such a small percentage of it. Among them are can You trade with a Stop Loss narrower than usual? Well this needs to be considered more.
And then what percentage of the best? Some professional traders say the best quantity is below than 2%! So 5% above still is too large indeed. With 2% If you have a capital of $ 1000 then the Stop Loss you need to shift to a mere 20 points only. Very small for a Swing Trader. But it is the correct percentage. This means that if you want to play swing then use larger funds. Remember, the capital could not be lied to.
4. Risk to Reward Ratio
Risk to reward ratio is a comparison between the risk you take with the advantages that accrue each time you open a position. In practice this will translate later on how the big points and Stop Loss Limit that you use each time a position taken.
Novice traders frequently determine the quantity Limit them but not at all using a Stop Loss. The reason: If using Stop Loss and Limit, more often his Stop Loss touched so often lose out. So finally most beginners trade by using the Stop-Loss Limit but forget them.
Well this so classic symptoms that occur nearly around the novice trader. In fact Our only legitimate trade in this way. The positive side of trading like this is our moral will is getting better from day to day because every position taken more profit and never loss even
. But the risk to reward ratio, it does actually harm the trader himself. Let's say the Limit taken is as much as 30 points. By not placing a Stop Loss then the comparison advantage and risk being 30: ~ aka 30 points as opposed to an infinite loop. This is because when the risk is really terrealisasi then it means all funds You will be exhausted due to the limitation of the risk itself is
a Margin Call. The ratio such as this really does not make sense. From 100 times we Transact and 99 times we win with just a one time transaction we experience a fatal error on capital gains and then the rest of Us vanished! The forex world is full of graves of the novice trader model like this. Who want to catch up? HIHIHI, isn't scaring lho, this interests You it shall be understood that the trade that there is a risk that needs to be controlled.
Well by doing so it is important to set the Risk to Reward Ration You correctly. So forget about trade without a Stop Loss! If in your trading Stop Loss You frequently touched then maybe you need to reset the trading system and determination of Stop-Loss and limit you. Bottom line, don't blame the presence of Stop Loss when your position terlikuidasi. The existence of Stop Loss here is to limit your losses and not to membankrutkan
with you. So, what is the comparative Risk to Reward good? Of course the bigger the reward and the less risk is a most excellent choice. Consider the following case examples:
If you determine Your Risk is 30 points while Your Reward is 60 points then with a capital of $ 1000 and there is 1 lot only open positions each time the transaction. Let's say in 50 times your transactions experienced loss as much as 30 times profit 20 times and then at the end of your transaction to-50 you still accounting for profit even though the number of transactions more loss than profit:
|
Transaction
|
30 Points Loss
|
60 Points Profit
|
|
0
|
1000
|
-
|
|
1
|
970
|
-
|
|
2
|
940
|
-
|
|
3
|
910
|
-
|
|
4
|
880
|
-
|
|
5
|
850
|
-
|
|
6
|
820
|
-
|
|
7
|
790
|
-
|
|
8
|
760
|
-
|
|
9
|
730
|
-
|
|
10
|
700
|
-
|
|
11
|
670
|
-
|
|
12
|
640
|
-
|
|
13
|
610
|
-
|
|
14
|
580
|
-
|
|
15
|
550
|
-
|
|
16
|
520
|
-
|
|
17
|
490
|
-
|
|
18
|
460
|
-
|
|
19
|
430
|
-
|
|
20
|
400
|
-
|
|
21
|
370
|
-
|
|
22
|
340
|
-
|
|
23
|
310
|
-
|
|
24
|
280
|
-
|
|
25
|
250
|
-
|
|
26
|
220
|
-
|
|
27
|
190
|
-
|
|
28
|
160
|
-
|
|
29
|
130
|
-
|
|
30
|
100
|
-
|
|
31
|
-
|
160
|
|
32
|
-
|
220
|
|
33
|
-
|
280
|
|
34
|
-
|
340
|
|
35
|
-
|
400
|
|
36
|
-
|
460
|
|
37
|
-
|
520
|
|
38
|
-
|
580
|
|
39
|
-
|
640
|
|
40
|
-
|
700
|
|
41
|
-
|
760
|
|
42
|
-
|
820
|
|
43
|
-
|
880
|
|
44
|
-
|
940
|
|
45
|
-
|
1000
|
|
46
|
-
|
1060
|
|
47
|
-
|
1120
|
|
48
|
-
|
1180
|
|
49
|
-
|
1240
|
|
50
|
-
|
1300
|
Note Although you more experienced loss of 50 transactions, but in the aggregate the financial condition of your trading remains the profit of 300 Dollars! Isn't this is the remarkable thing? At the end of the transaction, the funds at our disposal has reached 1300 Dollar from the previous 1000
dollars. This might look simple. However, many traders missed it and leads to not terencananya a trading well. As a result the Yes of course loss awaits. Loss, loss and eventual Total Loss! See you at the next class.
