In my advanced researches on how not to lose my entire account each week, I’ve eventually learned that I should use a risk management technique.
Here is what I came up with this weekend.
Wouldn’t mind for someone to look into it and say if I make any big mistakes in my calculations. If I you consider it good enough for you too, please feel free to use it at your own risk.
Short description on how to use it:
First carefully enter your account details: Account - your total account value, Leverage = 1/100 = 0.01. 1 lot = 100000 (You can change it to 1 lot = 10000 if this is what your broker/you use)
Enter the Entry Price (make sure you include the spread in it too)
Enter the Stop Loss Price (make sure you include the spread in it too)
Adjust the Risk 2% = 0.02 (however if you went to school you should know that is not such a good idea)
Let the spreadsheet calculate the Volume of your trade based on your Risked amount and the Take Profit Price
It seems that the example trades you have pre-entered are all buys. Are you happy that when you enter a sell then the stop, target and margin all show as minus numbers? Are you anticipating only one position open at a time? if you had multiple positions open would you like to also show come columns with cumulative totals?
I can not check it (No excel) but it sounds very good. Making the excel makes you understand how it works.
You can find a position size calculator on babypips that works online. I use an indicator on MT4 that does the yob for me Just moving a TP and SL line on the screen
Yep, that actually simplifies the used formulas. Otherwise I would have to introduce some IFs and ABS functions. Profit and Loss are always positive because -*-=+ (the beauty of Math)
Additionally, having a minus in front of volume marks the trade as a Sell. A Buy will not have that
Nope, I just anticipate that I know how many positions I have open at any time.
5 open positions, all with a risk of 0.02 - would mean a 0.1=10% risk of entire account. So my target is not to have more than 5 positions opened.
Would go even further with the calculations, but, I need to find first some good formulas for trading. In building this, I had to read several sites that only provided examples and some phrases explaining how it works, but rarely I could see a good clear formula.
“What is with these people, Why the hack maths scares so many people” used to love Math and I still do.
Yep, it helped me understand several things. It’s also the first step towards automating it in an EA.
Your indicator already does that, but who knows, maybe one day I’ll build my own EA
I don’t trade from desktop MT4 platform- well because I I’m all the time connected to the office VPN, so I enter and manage the trades from mobile MT4 platform.
Semi demo accounts, would that be a good definition?
50 to 200$ real accounts are almost demo accounts.
Saw that the way I react when real money are at stake is completely different than how I treat a demo account. I’m trying to find a balance between them. Using 0.01 volumes when 1 lot is 10k still keeps me within the risk margin from the spreadsheet.
The good news is that I can see I’m progressing week by week.
Have won more that I’ve lost this week for example.
I have to make my own mistakes to learn from them and, surprisingly losing kept my interest for learning.
used to love Math and I still do.