A trade and risk management plan

Beginner Questions
1

0.50 amount of bankroll so having total 1% amount of bankroll trade

50/150 Stop loss/Take Profit

when price is 50 or better trailing stop at break even

100/300 Stop loss/Take profit

when price is 100 or better trailing stop at break even

so it is 1/3 risk/reward ratio

i’m not sure about the trailing stop

what is you guys opinion’s

thx.

2

I’d tweak it as follows:

Risk 1-1.5%. Set P/L and SL at 1;1 or 1:2 because they are the most profitable outcomes tested. Use 4hr chart and if a winning trade reaches 75 points above entry - proving the trend movement is good, enter another 1-1.5% trade and move S/L manually up to or near the breakeven point.

You risk is still the same, but you get a free ride on the initial trade to wherever you choose to take a profit, or let it run further. Theoretically, that means you could continue indefinitely with adding and moving the S/L as long as the movement continues. Trends normally end with a big bang!!

Note:: risk reward 1:3 -1:4, and upwards are not profit makers in the long term.

2 Likes
4

this is absolutely right, and can’t be said often enough (especially in this forum where many people - mostly just repeating what they’ve seen others saying - will wrongly tell you the opposite)

not only is 1:3 very unlikely to be steadily profitable for you, but it’s also extremely difficult to handle regarding safe position sizes, as the losing periods will be much, much longer than you expect

1:1 or 1:2 are far, far more likely to be profitable and viable for you

and note Steve’s other very good and helpful points above, as well

2 Likes
5

thx for help

so it should be 100/200 and 200/400 ?

i’m trading on daily chart (swing trader)

6

Yes it is a risk management plan…

7

i have a simple doubt there is any difference between money and risk management its all about a same issue or there is any major difference ?

8

There are many types of support/resistance. Such as key level, event level, first support, and first resistant area, near term level. Each level of work is different. But the most important is the event level. You can get a detailed idea about these levels by searching online.

9

Hey how about you use the strategy on a demo account. I seriously believe testing your own strategies and then in case they fail, makes you a better trader coz end of the day you’ll know what mistakes you made and how you could correct them.

10

according to me, there is no major difference between two , its all about to avoid unfortunate risk and losses ?

11

This looks like a good risk management plan for your trades. Keep up the good work.

12

I’m not sure there’s a distinction between money and risk management. Is it the same issue or is there a significant difference?

13

I feel like money management doesn’t involve tweaking risk levels? Idk though. But was that your question? Money management vs. risk management? :sweat_smile: