Hello all. take a look at this MM set up, Hope you like....
A Traders Plan:
Let’s say that I told you my target batting average was 40% which means I’d be happy getting only 4 out of 10 trades right.
For my risk/reward I am going to go with 1:3---This means for every dollar I risk my profit will be $3. The max I want to make on a trade is $300
Here are my trading results for week one
Trade 1: -40 Pips
Trade 2: +20 Pips
Trade 3: -60 Pips
Trade 4: -120 Pips
Trade 5: +90 Pips
Trade 6: +10 Pips
Trade 7: +50 Pips
Trade 8: -50 Pips
Trade 9: -40 Pips
Trade 10: -80 Pips
Totals: -390 Pips in losing trades and 170 pips in profitable trades. (not looking so good….) A pip loss of -220
Remember the Money management rules???
Here is how each trade would break down:
Trade 1: -40 Pips= 0.25 Lots Traded (Each Pip Move - $2.50) -$100
Trade 2: +20 Pips= 1.5 Lots Traded (Each Pip Move = $15) +$300
Trade 3: -60 Pips= 0.16666 Lots Traded (Each Pip Move = $1.67) -$100
Trade 4: -120 Pips= 0.08333 Lots Traded (Each Pip Move = $0.83) -$100
Trade 5: +90 Pips= 0.3333 Lots Traded (Each Pip Move = $3.33) +$300
Trade 6: +10 Pips= 3 Lots Traded (each Pip Move = $30) +$300
Trade 7: +50 Pips= 0.6 Lots Traded (each Pip Move = $6) +$300
Trade 8: -50 Pips= 0.2 Lots Traded (each Pip Move = $2) -100
Trade 9: -40 Pips= 0.25 Lots Traded (each Pip Move = $2.50) -100
Trade 10: -80 Pips= 0.125 Lots Traded (each Pip Move = $1.25) +$-100
As you can see with the money management in place, we made a profit of $600!!
This is why when someone says “I make 100 pips a week” it does not impress me very much. We actually lost 220 pips in the above example and we still made money!
It is best to focus on risk/reward, and set your lot size based of your stop loss/target prices.
A Traders Plan:
Let’s say that I told you my target batting average was 40% which means I’d be happy getting only 4 out of 10 trades right.
For my risk/reward I am going to go with 1:3---This means for every dollar I risk my profit will be $3. The max I want to make on a trade is $300
Here are my trading results for week one
Trade 1: -40 Pips
Trade 2: +20 Pips
Trade 3: -60 Pips
Trade 4: -120 Pips
Trade 5: +90 Pips
Trade 6: +10 Pips
Trade 7: +50 Pips
Trade 8: -50 Pips
Trade 9: -40 Pips
Trade 10: -80 Pips
Totals: -390 Pips in losing trades and 170 pips in profitable trades. (not looking so good….) A pip loss of -220
Remember the Money management rules???
Here is how each trade would break down:
Trade 1: -40 Pips= 0.25 Lots Traded (Each Pip Move - $2.50) -$100
Trade 2: +20 Pips= 1.5 Lots Traded (Each Pip Move = $15) +$300
Trade 3: -60 Pips= 0.16666 Lots Traded (Each Pip Move = $1.67) -$100
Trade 4: -120 Pips= 0.08333 Lots Traded (Each Pip Move = $0.83) -$100
Trade 5: +90 Pips= 0.3333 Lots Traded (Each Pip Move = $3.33) +$300
Trade 6: +10 Pips= 3 Lots Traded (each Pip Move = $30) +$300
Trade 7: +50 Pips= 0.6 Lots Traded (each Pip Move = $6) +$300
Trade 8: -50 Pips= 0.2 Lots Traded (each Pip Move = $2) -100
Trade 9: -40 Pips= 0.25 Lots Traded (each Pip Move = $2.50) -100
Trade 10: -80 Pips= 0.125 Lots Traded (each Pip Move = $1.25) +$-100
As you can see with the money management in place, we made a profit of $600!!
This is why when someone says “I make 100 pips a week” it does not impress me very much. We actually lost 220 pips in the above example and we still made money!
It is best to focus on risk/reward, and set your lot size based of your stop loss/target prices.