You Now Have$ 1200 In Your Trading Account

Category: Finance, Currency Trading.

Money management is the most important and overlooked subject in trading!

In this book, he teaches Fixed Ratio money. management. In my opinion, the best money management system for Forex/ Futures traders is outlined in great detail in Ryan Jones book The Trading Game: Playing by the Numbers to Make Millions. This method, will help any, he argues trading system as long as it is profitable over time. For example let s say it s 1000 USD. This is how to put the fixed ratio money management system into practice: Start with the total number of dollars in your trading account. Now pick how many pips profit you need to achieve before you trade with more lots.

Now start trading. 1 mini lots( which is profit/ loss 1 USD) . Let s say 200 pips( 10 pips/ day for 20 trading days in a month average) . You would only increase to. 2 lots after gaining 200 pips. Here is an example of how fixed ratio trading would work: Month 1: $1000+ (200 pips x. 1 lot= $200) Total: $1200. When you gain 200 more pips profit you would trade. 3 lots etc. You start with$ 1000 in your trading account and after 1 month of trading you gain 200 pips profit trading. 1 lots.

You are now at the next level. You now have$ 1200 in your trading account. If your account balance falls below$ 1200 then you will go back to trading. 1 lots. You now start month two with$ 1200 and gain 200 pips profit trading. 2 lots. Month 2: $1200+ (200 pips x. 2 lots= $400) Total: $1600. You now have$ 1600 in your trading account. If your account falls below$ 1600 then you will go back to trading. 2 lots.

You are now on the next level. Month 3: $1600+ (200 pips x. 3 lots= $600) Total: $2200. You now have$ 2200 in your trading account. You now start month three with$ 1600 and gain 200 pips profit trading. 3 lots. You are now on the next level. Month 4: $2200+ (200 pips x. 4 lots= $800) Total: $3000. If your account falls below$ 2200 then you will go back to trading. 3 lots.

You now start month four with$ 2200 and gain 200 pips profit trading. 4 lots. You are now on the next level. You now have$ 3000 in your trading account. If your account falls below$ 3000 then you will go back to trading. 4 lots. You now start month four with$ 3000 and gain 200 pips profit trading. 5 lots. Month 5: $3000+ (200 pips x. 5 lots= $1000) Total: $4000.

You now have$ 4000 in your trading account. If your account falls below$ 4000 then you will go back to trading. 5 lots. You are now on the next level. RESULTS: Month 6: $4000+ (200 pips x. 6 lots= $1200) Total: $5200. Month 8: $6600+ (200 pips x. 8 lots= $1600) Total: $8200. Month 7: $5200+ (200 pips x. 7 lots= $1400) Total: $6600. Month 9: $8200+ (200 pips x. 9 lots= $1800) Total: $10000.

Notice that gaining an average of 10 pips a day, along with fixed ratio money management helps your equity grow asymmetrically. Month 10: $10, 000+ (200 pips x 1 lot= $2000) Total: $12000. Your$ 1000 turned into$ 12, 000 in 10 months! If you wanted to be more conservative than the above example, you could simply add more pips profit in the formula. Notice that your trading system doesn t have to always hit a home run, you simply need to average 10 pips/ day in this example. For example you could only increase number of lots traded after gaining 400 pips instead of 200 pips like in my example. Try setting up a fixed ratio money management plan before you start your next live trade!

This would mean slower growth. This unique approach to day trading the EUR/ USD involves using financial Fractals and no other technical indicators, as outlined in the Euro Fractal Trading System.