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Interesting thread, but the money management is pretty basic like many posters here put it. There are alot more refined ones. If you are looking to do this I suggest you study pyramiding into trades and that allows for achieving 1 to 5 r&r on average volatility. Say for example you have 1 entry with 1 r risk, if it trends you can add 1 more entry and move your stops to the first entry's position and get 1r risk but price is increasing at 2r per 1r volatility value. Hence by moving 2r you get 3r rewards for 1r risk. 3r volatility value you will get 5r returns on 1r risk.
Btw money management like this is really old and you can see people like Jesse Livermore doing it.
Just that, you need a trading model which is really good to work it, and by trying for 10 to 1 r and r, the implied reasoning is you need a really strong trend or very good timing, just that whipsaws will kill your system, plus you need to see if the pairs volatility supports it. I can tell you by experience if you can hit a 1 to 3 r and r with a 40% to 45% accuracy rate, it's good enough. With this kinds of system you will meet alot of scratch trades.
As is common knowledge(to be debated in my opinion) the markets range 70% of the time and trends 30% of the time, so as for how many percentage are whipsaws, and are gonna chop you up, nobody knows. So you will have to handle the chops and ranges as, your entries risk and reward are defined by the volatility factor in these types of market environment, so, you may want to keep things realistic.
Btw, I can tell you, usually it's when the markets environment changes that's what gets these systems. That's when you will have to check your stats and risk of ruin to see if it's still feasible.
Why do I know this? Well I guess I have tried it before and I understood the catches to these kinds of systems and, well I didn't do as well as what I thought would(which is what you wrote in your first post), just to clue you in, the other posters ain't wrong either, they are just trying to ground you in reality.
End of the day, I guess the best focus is on trying to minimize drawdown and trying to stay afloat would be the number one priority. It's not just how much you make that matters, how much you don't lose matters more.
I am going out of sim in a few days, so my 1 contract at a time journey will begin soon.
I have to think though, if you were using real money and you got to that $100,000 level, could you really stomach doubling down and going for broke. It's one thing to say "no big deal", but another to actually go through with it when you see that figure in your trading account. Knowing you had that much and just going for broke, could really damage your psyche, even if you tried to do it again. I would maybe think that strategy through and say, whats the rush? There comes a point when you can earn enough to take care of your needs and have extra while slowly growing the account. Even if it took say 3-5 years, you would be building trust and confidence in your system and yourself along the way. You could still enjoy the fruits of your labor while controlling risk and building to that millionaire level. I look forward to testing these out once they become available. I also don't look at it as the markets money. It's money you earned through the many hours spent studying and testing the markets to get to this point. It should be respected and protected along the journey.
It was a figure of speech, of course I would be nervous trading $100,000.
Besides, do you remember my "3 doublings and back" method?
The first time you reach the end of level after 3 doublings (from 1 to 2 contracts, 2 to 4 and 4 to 8), you should always put all the money in the bank and start that level again a 2nd time but now you will have 8 blocks in the bank to restart that level.
So if we can reach the $100,000 level (which I don't think we will btw) there will be plenty of orange back levels waiting for us as a safety net (Orange $25,000, $8,000, $2,000, $500, $100) before we lose the original green $25 that started it all so I won't be freakin out that much.
Sure it will suck but I will bring back the other $25,000 and try to double it to $50,000 and then double it again to $100,000. All we need is 5 pts.
Back in 2014 the average daily range of the Russell Mini contract was around 14 pts, today it's double that amount (28.9 pt in 2018) so 5 pts is still a lot but I believe it's doable. Not everyday because some days the RTY is stuck in a range.
I work with this indicator now several years, it is not a system and it is lagging, but can give you nice direction indication, nothing more. the code itself is just a few lines.
I use it in a system on sierra charts, but the entries are based on other indicators. I use it on the Gold, CL and DAX and currencies, I think the Russell is a bit to fast to get good entries consistently.
I shared the code on tradestation (and used it mainly on TS / Multicharts) a while back, you can now also get it for MT4, under a different name, but since MT4 uses mainly time bars, it does not show up that nice.. I had it programmed for Sierra charts and I still use it a lot. After TS, I just love the capabilities from SC!
Do a bit of "googeling" yourself and you will find the eld or MT4 version if you want to see the code.. Yes, do not ask me, do the work yourself, "it is not about the destination, but the journey where you learn the most"..
I wish Merlin all the best, although I think it is all about trading and making money, not about showing graphics and ones in a while a live trade. Like myself, we are all a bit of a dreamer. :-) But I like his positive energy, and surely wish he will soon show a lot of great live trades!
Nope, no lag with my indicator because the clouds are built with a Squared MA which is a center line of a Donchian Channel that is based on a fixed price (ex: 5 pts) instead of past bars like most MAs.
Because of that, if the threshold is exceeded by even 1 tick, the entire cloud color will change "down to the tick".
Like I said, years of experience pays off! But then again if I listen to the "experts here", I'm just a new 49 yr old "kid" who don't know shit about trading and apparenlty, I haven't been burn yet so... what do I know right?
Which part of it's based on a FIXED PRICE channel that you missed here?
Is is NOT based on past bars like regular MAs (ex: 9 or 50 MA). Because of that those type of MA lag, NOT MINE. Look at my 5 pt high channel here...
For example, say the channel is 5 pts high and the price makes 1 tick ABOVE that high, the ENTIRE channel is being crossed ON THAT SINGLE TICK the color of the channel changes and because my Squared MA is the center line of that channel, it also changes color and since the clouds are created with those squared MAs, they also change color instantly.
So as you can see with a zoom of that channel, when the price hits the border of that channel, if the price pushes the channel even 1 tick higher.... BOOM.... the entire channel and my squared MA in the center changes color.
Do you get it now? If you don't then don't bother reply because I won't.
Of course I can see it, I came up with the idea, programmed it and found out others did the same, all good..
And yes it can react, depending on the settings, even on one tick, but that does not mean anything jet.
It all looks nice in hindsight, but what about the right end edge, and trade live with a very small stop-loss(?) you need more then just an overall direction indication. And do not get me wrong, I love it for that use!
But even with a 5 pt channel, what gives you the confidence that it would not change direction at moment of entry? your Squared Moving Average(?).
Please make 100 live entries and post your findings.. lets be realistic here..
Anyway going back to "live" trading..
PS: any MA can change color instantly on one single tick :-)
It sounds like you have been thinking about this "millionaire in 10 weeks" thing for years.
When you say you have "years of experience", is that making money, if so why not carry on just doing what you are doing and accumulating wealth. Or losing money over the long term, if the latter then lots of us have years of experience of that too.
Good luck on the new account. I'll come back in three months and look forward to seeing the results.
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden