I've designed my Money management plan with targets/goals

Beginner Questions
1

I’m still pretty new to this, however, I was hoping to get a little feedback.

Based off a $200 starting balance in my live account with 50:1 leverage
If a monthly goal is achieved earlier than expected, I move on to next months goal.
If my regular income allows, I can deposit additional funds into the account to accelerate the plan.

The plan considers both Monthly and yearly goals/targets. The lot sizes denoted in yellow are what I will allow myself to trade on any given position at the current account balance. i.e. For the month of March in my spreadsheet, I have already achieved the target. So I am now on my April step.

Anyway, thanks in advance for any feedback.

fi

MMplan.jpg700×570 103 KB

2

Are you going for the same monthly goals % wise in december as in lets say may? If so I think you have to tweak it a little bit since it could be that you will make december/january a little bit less since lower market volatility.

3

Yeah, I was just gonna go for 7.5% monthly gains. The dates are really just steps if you will, but it keeps the goals in line and my trading under control. I may be at my December 2011 step by the end of the summer or earlier. I maybe should rewrite it and instead of using monthly goals… maybe steps or thresholds. Not sure on that.

4

Wow, very thorough. =)
Best of luck fihunts. =) I too started with $200, except my money and risk management is a tad more aggressive than yours.

Regards,
Clark.

5

Thanks Clark! What kind of goals/targets do you have?

6

Well, just glancing at your picture, and the totals. My goals are a little more demanding.

Currently, I have been risking 2% every trade, I know that’s a lot for a beginner like myself to start with. But I have been consistent with it and don’t have much psychological problems getting in the way. Besides, I’d need to lose around 34 trades in a row to go down to half of my equity, that’s almost as hard as winning 34 trades in a row.

Also, I have started reading up on other risk management techniques to emphasize wins and hopefully reduce losses. I had been looking at the Kelly Criterion as a multiple of my risk %, it’s a higher risk for sure, but doesn’t exceed about 3.5% per trade, and I will only ever enter one trade at once and usually only one a day for that matter. Currently, I have started to demo with it, and see how that is going, if satisfactory, I will incorporate it into my trading plan.

Since you and I are both fimilar with ICT’s thread, I am trading mainly with his principles. Except, I am aiming for much higher reward to risk ratio trades. My last 4-5 trades have had about an average of 4:1 ratio.

I know you’re thinking my trading must be extremely aggresive, but it isn’t so. Since I try to restrict my trading to about 1-2 times a week, and only during London Opens. I’ll admit though, with high reward to risk ratio, and 2% risk, I am almost gaining 7-8% weekly… Which is starting to bother me. (I usually aim for 80-100 pips weekly, once I have grabbed 80 though, I will be extremely selective of my entries and trading, unless the probabilities are extremely favourable, I won’t risk it.)

It’s a nice amount, don’t get me wrong, but I fear it may be too much, and I am worried that I may look for more in the future which will prevent me from being consistent…

But we will see I guess… =)

Edit: I like your spreadsheet, and I will try to duplicate it myself and show you it. =) You and I are some of the few beginners that I see here now with somewhat realistic goals, hence I like to keep in touch with you. :stuck_out_tongue:

Regards,
Clark.

7

Sounds good Clark and yep, you are definitely pulling down a much larger percentage than I am. You working a 30% total for the month. I would love to be able to do that and not have a heartattack everyday. However, I’m afraid that is what would happen with me. 7.5% a month, more than enough. :slight_smile:

Definitely keep in touch :slight_smile:

8

Well, 33.5% is what I’d like in the long run. And when I say long run… I’m talking like 5-10+ years. :stuck_out_tongue:

But as of now, a 15% monthly ROI is more than satisfactory.
Current goals is to just build a solid, consistent trading foundation and mental commitment, for when I am out of high school and university.

Here’s a quick screenshot:

Regards,
Clark.

9

Hey guys,

I’m also new and also try to have realistic targets and goals rather then thinking of this as a get rich quick scheme. I’ve made numerous of similar spreadsheats myself to project profit with different starting capitals, different % goals etc, but although I believe it’s a good thing to set targets and work towards them, I don’t think it’s realistic to expect a linear (and thus a constant %) growth.

I think it will be more like an exponential growth until it flatlines somewhere to a more constant level of performance over time. You’ll gain more experience over time, learning from mistakes along the way etc. And of course unexpected things can happen that will turn the market around.

What could happen for example is that you’re in a tough month and behind your target and you’ll make some risks to try and gain some ground… only to bring you down even more. I guess that’s where the mental thing becomes important :).

Anyways, I’ll still probably work with a similar model to you both, but will probably add something in the equation as to withdraw 50% of the profits every month and leave the remaining 50% to grow the account balance.

Anyways, good luck to you! I’m still in the demo phase :slight_smile:

10

Thanks for the input dgerards, and best of luck on your trading. =)

If you put the targets and profit as a line graph, it is in fact an exponential growth. (THANK YOU compounding!) :stuck_out_tongue:

And no we will all have dips and downs, if only it weren’t so, but at the same time, you never know when you can go over your targets, 3 weeks into trading and I’m already over my April goals. But I definately understand where you are coming from, and losing is just a part of that, can’t deny that of course. =)

dgerards, if you need something to base your spreadsheet on, I’m more than willing to send you mind. =)

Regards,
Clark.

11

As Clark said, the date is just a goal. Nothing more, if I beat or exceed it. I am ahead of the game. The idea is to not break the money management rule if you are running behind. Rather not break lot sizes when your account balance is sitting at a certain size.

My concept is to take care of the account by not putting yourself into an over leveraged account where you might get a margin call. Forget the dates all together. I’ve thought about this all night. I don’t want this date driven anymore…

Clint, bare with me till later today. I like the idea of a stepped or stair based money trading strat.

DG, ty for your thoughts… but definitely keep thinking. :slight_smile:

12

Originally Posted by ClarkFX
If you put the targets and profit as a line graph, it is in fact an exponential growth. (THANK YOU compounding!)

Ah yeah the balance is, but I mean to keep a steady 7-8 (or whatever number) % of growth of your balance every month :). But regardless, I do think it’s good to set targets and work towards them, just don’t let the targets work against you.

Instead of a 5-year plan I think it’s best to work with short-term targets, e.g. quarterly and then review your results and amend targets as necessary for the next quarter etc.

Originally Posted by ClarkFX
dgerards, if you need something to base your spreadsheet on, I’m more than willing to send you mind. =)

Thx, but no worries, I’m quite advanced with excel :).

Originally Posted by fihunts
Forget the dates all together. I’ve thought about this all night. I don’t want this date driven anymore…

I think you should, but just don’t make a 5-year plan. Go for short-term targets and keep reviewing them.

13

Even though it is written out in a 5 year plan format. That merely serves as the overall framework. I could or clark could zoom into each month as well. In fact I very well may get my plan dialed into what I should do for each month. In my plan, if executed correctly a parent could pay for a childs first two years of college at the end of it when the kid was the age of 13.

Mine is definitely very low risk
Clarks is pretty much double the risk of mine and his is actually very doable as well.

I mean heck, I think the most mine ever calls for is 200 pip gains in a month?? Many people want those types of gains in a week or even a day.

14

Yes haha, I agree my risk is nearly double fihunts, but his is very conservative in nature to begin with. I see beginners looking to double their equity once a month/quarter.

Currently, my average Reward to Risk Ratio is around 3.8 so the risk isn’t as high as you may think it is, risking a mere 2% per trade still gets me 7.6% if the trade was a success, obviously not all trades are going to go that smoothly, but even one of those a week will easily allow me to catch up or reach my goals. =) I had only planned the first three years, and each week as well on a separate spreadsheet. (Simply cause the 4-5th years go to the hundreds of millions… and I definately don’t expect that… :p)

Hope that helps.

Regards,
Clark.

15

Definitely conservative, but its not completely fleshed out either. I have some other ideas about speeding it up. Like, no more spending 7 bucks at a fast food joint, growing a garden, FISHING!.. lol. You know how much money you can save if you catch your own food?!? But, I actually want to add more funds to the account to get it moving, while still sticking to my rules in trading.

16

After catching, you also have to prepare it.

Which costs both money and time =)

It only becomes financially wise to scout for your own food if you can’t produce enough money in the same time to buy the amount of food hehe =)

17

LOL david! What if I don’t have to clean it, just catch it?

18

It still depends.

Let’s suppose you take 1 hour catching the same amount of food you can get on the local market for 15 US$

But if you can make 20$ working in another way, then it’s a bad option to scout your own food :stuck_out_tongue:

19

LOL… True, I’m with David. :stuck_out_tongue:

Hey Fi, just sent you an email with my final design. I think you’ll really enjoy it.
I’ve got an advanced calculus midterm tomorrow, so won’t be trading tonight. Wish me luck! :smiley:

Regards,
Clark.

20

It’s important to consider that fish do compound on an annualised basis, the percentages vary a bit but if you set your maximum drawdown to about 30 fish, set a realistic fish taking level and take only a small percentage, your annual fish returns could be quite high.

Of course, dealing with live fish can be a very different experience when compared to just a demo fish calculation. Note, this should not be construed to be actual fishkeeping advisement, I am not a certified fish stock manager and never invest fish that you can’t possibly afford to not eat.