Money management for dummies!

dimsdaletraders

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hi folks

Okay, I think (THINK!) I may finally have wrestled this to the ground this weekend and am starting to understand the basic principles, but I'd be real grateful if one of you that truly 'grok' it could tell me if I have these figs correct. This is a very primitive way to do it, but I've tried to keep it in terms that my brain can actually get a hold of.

(and if I'm wrong, please can I ask you to keep your explanations to 1+1 levels. I SUCK at maths!)

okay. In order to increase an starting account of £x by 10% of x overall, across every group of 10 trades (ie a 100% increase for every group of 10 trades, so at 1% risk of x per trade, that's a 10% increase in x), I would need the following.

A win/loss ratio of 80% would mean I needed a reward:risk ratio of 0.5:1.

For a win/loss ratio of 70% I need a reward:risk ratio of 0.857:1.

For a win/loss ratio of 60% I need a reward:risk ratio of 1.33:1.

For a win/loss ratio of 50% I need a reward:risk ratio of 2:1.

For a win/loss ratio of 40% I need a reward:risk ratio of 3:1.

For a win/loss ratio of 30% I need a reward:risk ratio of 4.66:1.

For a win/loss ratio of 20% I need a reward:risk ratio of 8:1.

For a win/loss ratio of 10%..well frankly, I'd need a miracle!

*just re-reads all that, and tries to stop my synapses frying*

All help/advice/hand-holding gratefully received...mocking laughter from the cheap seats kinda expected! *grins*

keep on truckin..

Tess
 
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