Hi benjam1n, from your question i see that you are risking 100 pips per trade and profitng 50 pips…In this case, yes, very high chances of wipin out our account. But if it is the other way around like, 50 pips risk and 100 pips profit and we have 3 winning trades in a row (i.e 300 pips) and one loss (i.e 50 pips) we are still up by 250 pips. This is why DnB say’s he is not much afraid of the losing trade cause his winners are big in ratio. Just my understanding.
Well thanks for answering but that’s not quite what i meant. As i’m sure you know the amount you risk depends on the setup at hand, so i’m wondering if he avoids setups where the risk is above a certain point.
The way a do it is always risk the same amount of money, no matter if I use a 25 pip SL or a 200 pip SL. Then, to compound the profit, I increase the amount when I reach an specific percent in the equity curve, i. e. if I have a 5,000 account I’ll risk 250 per trade and increase to 300 when I reach 6,000.
Just my two cents. Comments welcome.
P.S. Weekends are boring. LOL.
Hi DnB, It’s obviously a great R:R to have 1:3 minimum for each trade, but what is the max you’d risk and why? I ask because if you win 3 trades in a row profiting 50 pips each but then lose the next trade where the risk was 100 pips it would wipe out a lot of your profits right? Or would you just adjust position size for these higher risk potential trades?
This is where most people are using money management wrong. Pips has nothing to do with money management, it’s all about the $'s risked. You need to calculate your lot sizing - not just throw on 0.1 lot on every trade. This way you know you only risk a certain amount of [B]$[/B] on each trade regardless of pips.
If one trade was 100 pips, your lot size is going to be smaller than if the trade was only 50 pips. This is one major advantage in Forex being able to calculate lot sizing so accurately.
I could risk $50 over 500 pips if I wanted to, then on the next trade risk $50 over 35pips, the risk is the same… the only thing that is going to chance is the lot sizing.
I am glad I missed my entry on AUDUSD, attempts to push down lower failed. Looking across the board Gold, the S&P500 and the Dow all closed bullish into the week. AUDUSD respected support and the weekly candle closed bullish.
I might go long on AUDUSD next week, momentum looks bullish, price closing on the bullish side of the EMA’s and respecting support & mean value. Hopefully there isn’t any dramatic gaps over the weekend.
Great thread, subscribed
Nice. Would u trade Nzd or Aud better? Both have the same signal.
They are both heavily correlated so it doesn’t really matter, NZD tends to be more explosive these days. I think I just have a soft spot for AUD…
Weekends…
Thanks again for the great thread DnB.
Can I ask do you trade professionally or for a full time living? And if so do you use this same method to achieve it?
Yeah I trade for a living,
Of course I use this method lol, I use it because it works 
Hey DnB, may I reask my question of few posts ago?
So if I’m understanding right, in your choice to enter or not on a trade, you don’t care about support/resistance, even if they are placed only few pips above/below your entry point, right?
You just place your R:R to minimum 1:3 and use support/resistance just to exit your trades in case of contary price action signals in those areas, right?
As usual sorry for my english… hope to be clear
I take everything into consideration,
Sometimes nearby S/R turns me off a trade, depending on how significant the level is and what the market is doing that the time. If the signal and trend momentum is good I play the odds that the level won’t hold.
What do we think of the violent way the market opened?
I think the market is being driven mostly by fundamentals at the moment and is reacting to the news about the Spain bailout package. I guess we’ll just have to wait to see which direction the Euro pairs will take but I’m guessing they’ll head north until a few some other Euro disaster comes out.
What do we think of the violent way the market opened?
Annoyed, it wrecked my plan to long AUDUSD!
Wait for a retrace. Deux caritas est.
The market is probably going to fall back down into the gap, probably won’t get a good signal until mid week :/, Stupid gaps
Good morning guys
This weekend was Spain and the next will be the same with Greek Parliamentary Election.
Be careful
Yeah, fundamentals are interesting but I don’t let them get in the way of my trading. Price action is my guide for the charts
Too many surprises when trying to follow and trade news events.
Have any of you ever considered or used ATR along with this method for SL’s or TP’s? I like the idea of it and how it could act as a dynamic SL/TP.