The Money Management & Risk Management Strategy

The Money Management

The money management is one method of risk management that maximizes the chances of success. It features rules based on adjusting the size of positions and management of the stops that must be followed scrupulously. This technique should be known to every trader because it can redeem the mistakes of analysis, preserve capital and significantly increasing the probability of gains. The Mastery of risk is the foundation of success.

Risk Management Strategy

We should know :

Capital
Max Loss in $ or %
Pip loss = Enter deal – Stop Loss
Value/Volume/Size of a Pip

Stop Loss

Exemple-1-

Capital = $1000
Max loss in $ = $50
Pip loss = Enter deal – Stop Loss = 1.5580 – 1.5540 = 40 pip

Max loss in % = (Max loss in % * 100%) / Capital = ($50 * 100%) / $1000 = 5%

Value of Pip = Max loss in $ / Pip loss / = $50 / 40pip = $1.25


Exemple-2-

Capital = $2000
Max loss in % = 5%
Pip loss = Enter deal – Stop Loss = 1.5580 – 1.5540 = 40 pip

Max loss in $ = (5% * $2000) / 100% = $100

Value of pip = Max loss in $ / pip loss = $100 / 40pip = $2.50


Take profit

Exemple-1-

TP = 100 pip * $1.25 = $125


Exemple-2-

TP = 100 pip * $2.50 = $250

Loss = 40pip/deal
Earn = 100pip/deal

TOTAL Gain = Earn – Loss


I made 10 deals


Exemple-0-
I do waste 5 deals
I do earn 5 deals

Total Gain = ( 5 * 100 ) – (5 * 40) = 500 – 200 = 300pip



Exemple-1-
I do waste 4 deals
I do earn 6 deals

Total Gain = ( 6 * 100 ) – (4 * 40) = 600 – 160 = 440pip


Exemple-2-
I do waste 6 deals
I do earn 4 deals

Total Gain = (4 * 100) – (6 * 40) = 400 – 240 = 160pip


Exemple-3-
I do waste 3 deals
I do earn 7 deals

Total Gain = (7 * 100) – (3 * 40) = 700 – 120 = 580pip


Exemple-4-
I do waste 7 deals
I do earn 3 deals

Total Gain = (3 * 100) – (7 * 40) = 300 – 280 = 20pip


I did get from those exemples that MUST use this Rule to get a good profit

EARN = 5/2 * LOSS

If you want to print it... this a doc

الملفات المرفقة

The Money Management.doc‏ (31.0 كيلوبايت, المشاهدات 7)

a mistake

Capital = $1000
Max loss in $ = $50
Pip loss = Enter deal – Stop Loss = 1.5580 – 1.5540 = 40 pip

Max loss in % = (Max loss in $ * 100%) / Capital = ($50 * 100%) / $1000 = 5%

Value of Pip = Max loss in $ / Pip loss = $50 / 40pip = $1.25

brother you are amazing, thanka alot and please let ask you if you don't mind . let say my capital is 500$ can you tell me how much the maximizes to enter the deal
thank

اقتباس:

المشاركة الأصلية كتبت بواسطة nimat

brother you are amazing, thanka alot and please let ask you if you don't mind . let say my capital is 500$ can you tell me how much the maximizes to enter the deal
thank

Capital is $500

Risk is 4%

Stop loss is 75 pip

**********
If you waste the loss is $20

use 1pip = $0.27

means: $0.27 * -75pip = -$20.25

You can make the formula that I did explain in a EXCEL file

it'll calculate that easily

we'll finish exemple in the case of gain

EARN = 5/2 * LOSS

So

BUT earn should be: EARN = 5/2 * 20.25 = 50.62

[QUOTE=elkeddani;429768]










thanks

you just countinue and we are following you

[QUOTE=nimat;429783]

اقتباس:

المشاركة الأصلية كتبت بواسطة elkeddani

Capital is $500

Risk is 4%

Stop loss is 75 pip

**********
If you waste the loss is $20

use 1pip = $0.27

means: $0.27 * -75pip = -$20.25

You can make the formula that I did explain in a EXCEL file

it'll calculate that easily

alright i will try to use your formula to calculate by myself

thanks

YES; Good luck

×××

Good luck Mourad

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