managing losing trades

foroom lluzers

Veteren member
3,611 135
This is my money management system

I start with 0.2 % risk , so after 4 losses my loss is 0.8%

then 0.4 % risk for next 4 trades , so after 8 losses my loss is 1.6 % +0.8 % = 2.4%

then 0.8 % risk for next 4 trades , so after 12 losses my loss is 3.2 % + 1.6 % +0.8 % = 5.6 %

then 1.6 % risk for next 4 trades , so after 16 losses my loss is 6.4 % +3.2 % + 1.6 % +0.8 % = 12 %
 

tomorton

Legendary member
7,365 994
Suppose you start with capital of £10,000. Are you saying you're left with 88% of this after 16 consecutive losing trades as per your risk plan?
 

foroom lluzers

Veteren member
3,611 135
Suppose you start with capital of £10,000. Are you saying you're left with 88% of this after 16 consecutive losing trades as per your risk plan?
yes

If you look at successful football managers , they are very defensive e.g Mourinho , Fergusion etc

To be successful , one has to be defensive
 

WklyOptions

Well-known member
269 24
Betting Schedules

Hi Foroom,

Whenever discussing betting schedules, it is also important to share what is the Avg EXPECTED Reward vs Risk ratio.

For example, if initial bet is 0.2% of Account Equity, what is the Avg profit size? Suppose it's (+2R) - then the Avg Profit is (+0.4%).

If you have detailed and accurate statistical data of Avg Profits vs Avg Losses, there are ways to calculate ideal optimized betting schedules.

Good topic. But remember - money mgmt is 30% of the trading pie. The Inner Game (Wealth Mindset) is 60+%. And System Entries, Stops, etc, are only 10% of the trading game.

Good trading to all.

WklyOptions
 

foroom lluzers

Veteren member
3,611 135
here info

why being defensive is important

2. The second reason to seek a high strike rate trading edge is rate of recovery, the following table shows the recovery needed as a % of the remaining account after drawdown, to re-establish the starting balance. It is clear from the table below that it becomes exponentially more difficult to recover an account to it’s starting balance. The loss of account is more likely with low strike rate trading system/methodologies for the reasons given in point 1 above.

% Loss intial capital % profit required to Recover
5-----------------------------5.3
10---------------------------11.1
15---------------------------17.6
20---------------------------25
25---------------------------33.3
30---------------------------42.9
35---------------------------53.8
40---------------------------66.7
45---------------------------81.8
50---------------------------100
55---------------------------122
60---------------------------150
65---------------------------186
70---------------------------233
75---------------------------300
80---------------------------400
85---------------------------567
90---------------------------900

http://www.trade2win.com/boards/first-steps/54890-why-high-probability-trading-so-important.html
 

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