|
| |
 | |
|
|
Currency Trading Information Channel |
 |
|
|
| |
|
| |
|
|
Currency Trading Information Channel |
|
|
|
|
|
Money Management - The Holy Grail Of TradingMoney management determines how much to risk on each individual trade. This is a vital element of any trading system - risk too much and the chances of going bust are too high, risk too little and the reward for trading is too low. The main methods for calculating trade size are: Fixed Fractional The number of contracts to trade is determined by a fixed percentage of current equity. As only whole futures contracts can be trade this, effectively, means that the trader uses 1 contract per $x of equity. For example 1 contract per $10,000. Fixed fractional, however, requires unequal achievement at different contract levels. For 1 contract every $10,000 to move from 1 contract to 2 requires a profit of $10,000 from 1 contract. To move from 10 contracts to 11 still requires $10,000 profit but from 10 contracts. So for smaller account sizes it will take a long time for the money management to actually kick in and for larger account sizes the number of contracts traded will jump wildly around. Using fixed fractional the number of contracts traded would be calculated as equity/x, where x=dollars per contract ($10,000 in the above example). Contracts - Equity Required $ 1 - 10,000 2 - 20,000 3 - 30,000 4 - 40,000 5 - 50,000 6 - 60,000 Fixed Ratio Fixed ratio adds a variable to the fixed fractional method. Fixed ratio adds delta to the calculation. The delta is a factor which is required to move to the next contract level. The lower the delta the more aggressive the money management is. The formula is: equity required to trade previous contract size + (number of contracts x delta) = Next level. Eg starting with a base of $10,000 for 1 contract and a delta of $5,000: Contracts - Equity Required $ 1 - 10,000 2 - 15,000 3 - 25,000 4 - 40,000 5 - 60,000 6 - 85,000 Comparing the above table to that for fixed fractional it can be seen that at the lower account levels less equity is required whereas as the account grows the number of contracts traded becomes less aggressive. Tim Wreford runs Online Futures Trading, a website that provides information and resources for traders. Tim also provides a free day trading system, the results of which are updated daily on the site.
 MORE RESOURCES updated Mon. June / 27 / 2022The Best Forex Brokers and FX Trading Platforms in 2022 ABC Action News Tampa Bay What are the Benefits of Currency Trading for Corporate Leaders? Analytics Insight 4 Ways COVID Boosted Currency Trading Yonkers Tribune. 10 Best Low Spread Forex Brokers for June 2022 Business 2 Community 10 Best Forex Brokers for June 2022 Business 2 Community What Every Australian Forex Trader Needs to Know Analytics Insight Pros and Cons of Forex Trading ForexLive 4 Reasons Environmentalists Care About Forex Trading Green Prophet Forex Forecast: Pairs in Focus DailyForex.com Dow Futures Trade Lower After Positive Week Investing.com India MERCURIA ENERGY TRADING SA SUCCESSFULLY CLOSES USD 2177500000 MULTI-CURRENCY REVOLVING CREDIT FACILITIES PR Newswire Dollar trading margins hit Sh10 in currency woes Business Daily Forex Today: USD/JPY Hits New 20-Year High Price DailyForex.com Thousands Of Armenian Workers Face Layoffs After Dramatic Rise Of The Dram Radio Free Europe / Radio Liberty Billionaire Ron Baron Says Recent Market Weakness Offers Huge Buying Opportunity; Here Are 3 Beaten-Down Stocks Analysts Like Yahoo Finance Forex Today: Hawkish RBA Sees July Rate Hike DailyForex.com Basics of Forex Trading – Part 1 Yahoo Finance GBP/USD Forex Signal: Evenly Balanced DailyForex.com StoneX Executes First Bitcoin Cash-Settled Swap GuruFocus.com Future of Bitcoin Trading in Mali London Post What is forex trading? Bankrate.com Mastering Forex Trading Psychology Finance Magnates Basics of Forex Trading - Part 1 FX Empire What are the Pros and Cons of Forex Trading? RealtyBizNews Moscow Limits Foreign-Currency Trading to Shore Up Struggling Ruble The Wall Street Journal What is forex trading and how does it work? The European Sting Forex Trading for Beginners: The Essentials Business Insider Africa How to Know Which Currency Pair to Trade Startup.info Currency Definition | US News U.S News & World Report Money Proven Forex Trading Strategies that Work in 2022 BusinessLine FX trading: A loser's game? ETF Stream Trading Forex vs Futures: Key Differences IG International The Most Common Warning Signs of a Forex Scam Finance Monthly Is forex trading a way to make a living? Nairametrics Currency trading in overdrive with dollar at highest level in two decades (NYSEARCA:UUP) Seeking Alpha BC: Tips for Success in Forex Trading Punch Newspapers CEO Of Cryptocurrency And Forex Trading Platform Charged With Fraudulent Scheme Involving Over $59 Million Department of Justice What is Hedging and how can it be used in Forex Trading? Deccan Herald What are the Top 10 Benefits of Forex Trading? SAPeople News Forex Trading TD Ameritrade Five Myths About Forex Trading Tech Guide How to Trade Forex TD Ameritrade Best books to learn Forex Trading from scratch Free Press Journal Forex Trading Hours: Limitless Trading in an Endless Market The Coin Republic Currency Investing Makes a Comeback | RIAIntel RIAIntel.com Why forex trading is not gambling Nairametrics Even the Foreign-Exchange Market Is Getting Kind of Crazy The Wall Street Journal FOREX.com Review | The Ascent The Motley Fool How To Compare The Relative Strength Of Currencies Finance Monthly Russian Authorities Crack Down on Illegal Currency Trading The Moscow Times Changing the Top Global Currency Means Changing the Patterns of Global Trade Carnegie Endowment for International Peace
|
