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Practical Formula for Money Management

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  • Practical Formula for Money Management in Forex Education_index
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Practical Formula for Money Management in Forex Education_xx
Having so much importance on a Money Management in trading, I tried to share this formula a little, as a basic description.

This formula is to determine the LOT that will be used on MT4 brokers that use 5 digits.

Information :
BALANCE = Capital
RISK uses 1% (can use between 0.1% to 2%)
SL (Stop loss) can use 25-50 PIP (it's up to each trader)
OP is done = 4 times the OP with a ratio of 3 loss: 1 profit

FORMULARS are as follows:

Lot = ((Balance x Risk) / OP) / SL

For example $ 100 capital
The formula is:
Lot = (($ 100 x 1%) / 4) / 25
Lot = 0.01

It is better if the SL uses a distance of 25 pips, then the TP distance is 100 pips.
If 3 x OP loss with the amount of $ 0.75 and when you TP at OP 4 with a profit of $ 1, of course you still get a profit of $ 0.25.

It looks small, but with MM that is good and right, it is certain that the funds we run can be far from the large loses

this is an example of a Money Management Model







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#1 - February 09, 2019, 10:35:08 AM
« Last Edit: February 09, 2019, 11:03:25 PM by Tahajud »

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Practical Formula for Money Management in Forex Education_xx
Having so much importance on a Money Management in trading, I tried to share this formula a little, as a basic description.

This formula is to determine the LOT that will be used on MT4 brokers that use 5 digits.

Information :
BALANCE = Capital
RISK uses 1% (can use between 0.1% to 2%)
SL (Stop loss) can use 25-50 PIP (it's up to each trader)
OP is done = 4 times the OP with a ratio of 3 loss: 1 profit

FORMULARS are as follows:

Lot = ((Balance x Risk) / OP) / SL

For example $ 100 capital
The formula is:
Lot = (($ 100 x 1%) / 4) / 25
Lot = 0.01

It is better if the SL uses a distance of 25 pips, then the TP distance is 100 pips.
If 3 x OP loss with the amount of $ 0.75 and when you TP at OP 4 with a profit of $ 1, of course you still get a profit of $ 0.25.

It looks small, but with MM that is good and right, it is certain that the funds we run can be far from the large Kerigian

this is an example of a Money Management Model


I don't agree with your review, because every trader has a different calculation, but the statement can be used as a reference for money management.

Thanks for you for your money management formula.
#2 - February 09, 2019, 10:44:10 PM

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Practical Formula for Money Management in Forex Education_xx
I don't agree with your review, because every trader has a different calculation, but the statement can be used as a reference for money management.

Thanks for you for your money management formula.
each person must have a different view of money management but it is better to just follow what is suitable for our trading style.
#3 - February 10, 2019, 03:25:19 AM

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Practical Formula for Money Management in Forex Education_xx
Having so much importance on a Money Management in trading, I tried to share this formula a little, as a basic description.

This formula is to determine the LOT that will be used on MT4 brokers that use 5 digits.

Information :
BALANCE = Capital
RISK uses 1% (can use between 0.1% to 2%)
SL (Stop loss) can use 25-50 PIP (it's up to each trader)
OP is done = 4 times the OP with a ratio of 3 loss: 1 profit

FORMULARS are as follows:

Lot = ((Balance x Risk) / OP) / SL

For example $ 100 capital
The formula is:
Lot = (($ 100 x 1%) / 4) / 25
Lot = 0.01

It is better if the SL uses a distance of 25 pips, then the TP distance is 100 pips.
If 3 x OP loss with the amount of $ 0.75 and when you TP at OP 4 with a profit of $ 1, of course you still get a profit of $ 0.25.

It looks small, but with MM that is good and right, it is certain that the funds we run can be far from the large loses

this is an example of a Money Management Model


yeah thanks for the input it was very helpful as i am a very beginner in the world of trading because management is very important to avoid the name MC, thank you so much i have to learn a lot to achieve success.

successful friend.
#4 - February 10, 2019, 04:32:40 AM

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Thanks for sharing bro, but your formula ia totally different from heehe

But maybe, i will tey what you write and compare it to mine, maybe it is work than mine
#5 - February 10, 2019, 04:41:10 AM

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Practical Formula for Money Management in Forex Education_xx
Having so much importance on a Money Management in trading, I tried to share this formula a little, as a basic description.

This formula is to determine the LOT that will be used on MT4 brokers that use 5 digits.

Information :
BALANCE = Capital
RISK uses 1% (can use between 0.1% to 2%)
SL (Stop loss) can use 25-50 PIP (it's up to each trader)
OP is done = 4 times the OP with a ratio of 3 loss: 1 profit

FORMULARS are as follows:

Lot = ((Balance x Risk) / OP) / SL

For example $ 100 capital
The formula is:
Lot = (($ 100 x 1%) / 4) / 25
Lot = 0.01

It is better if the SL uses a distance of 25 pips, then the TP distance is 100 pips.
If 3 x OP loss with the amount of $ 0.75 and when you TP at OP 4 with a profit of $ 1, of course you still get a profit of $ 0.25.

It looks small, but with MM that is good and right, it is certain that the funds we run can be far from the large loses

this is an example of a Money Management Model


Risk management in the form of a good MM and the right RRR can indeed produce consistent profits, moreover coupled with a certain profitable strategy will be even more optimal in gaining profit.

Many professional traders only use the smallest lot even though he already has a profitable system and good psychology. We should imitate it for the sake of our account security and the consistency of the profits we get.
#6 - February 10, 2019, 05:22:36 AM

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hello, what about if we deposit 50$ and use lot 0.01, and got floating, and what is the great moment to cut lose and take profit ? because i got panic somehow ? i kind of confuse about this money management thing
#7 - February 10, 2019, 06:05:34 AM

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hello, what about if we deposit 50$ and use lot 0.01, and got floating, and what is the great moment to cut lose and take profit ? because i got panic somehow ? i kind of confuse about this money management thing
I suggest if you have less than 100 $ of capital using a micro or mini account so you can control MM and can apply it because it is too risky if the capital 50 $ uses lot 0.01 in my opinion but it might be different views with the opinions of others.
#8 - February 10, 2019, 06:46:06 AM

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I suggest if you have less than 100 $ of capital using a micro or mini account so you can control MM and can apply it because it is too risky if the capital 50 $ uses lot 0.01 in my opinion but it might be different views with the opinions of others.
thank for your advice bro, i have already open a micro account right now its only 100 usc though. but i try to learn, using money management to control in forex
#9 - February 10, 2019, 06:48:02 AM

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thank for your advice bro, i have already open a micro account right now its only 100 usc though. but i try to learn, using money management to control in forex
You are welcome

I also started trying to apply MM to open a micro account. I was advised by one of my seniors in forex, so after learning in the demo, it is better to learn mentally in the micro account because in the mental demo we are not trained, so we need to practice creating micro accounts.
#10 - February 10, 2019, 06:53:00 AM

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You are welcome

I also started trying to apply MM to open a micro account. I was advised by one of my seniors in forex, so after learning in the demo, it is better to learn mentally in the micro account because in the mental demo we are not trained, so we need to practice creating micro accounts.
yeah, after losing in real account last year i try to find a way to learn forex even more and go into market rather than using demo, so i found this micro account thing and try that, its better than demo you gain real money if profit haha
#11 - February 10, 2019, 06:55:18 AM

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yeah, after losing in real account last year i try to find a way to learn forex even more and go into market rather than using demo, so i found this micro account thing and try that, its better than demo you gain real money if profit haha
I suggest not to practice a lot in the demo because it could be that our psychology gets messed up and carried away when trading on a real account, the reason for the psycho demo will be chaotic because basically in the demo there is no burden to our mentality.
#12 - February 10, 2019, 06:58:01 AM

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I suggest not to practice a lot in the demo because it could be that our psychology gets messed up and carried away when trading on a real account, the reason for the psycho demo will be chaotic because basically in the demo there is no burden to our mentality.
yeah thats true bro. i even open position with high lot in demo, its just fun but obviously it only fun not teach us about real money management, you have good thread here, thanks for sharing 
#13 - February 10, 2019, 07:00:10 AM

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I don't agree with your review, because every trader has a different calculation, but the statement can be used as a reference for money management.

Thanks for you for your money management formula.
I make a formula for management that is very low risk where the loss limit that I explained is very small and I am sure all traders want to implement it, unless indeed they want to trade with a high risk level



#14 - February 10, 2019, 08:56:20 AM

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each person must have a different view of money management but it is better to just follow what is suitable for our trading style.

In my opinion, everyone has their own way of trading, but in terms of management, I think all agree that the conditions of trading that are comfortable and safe and have the potential to be able to grow are trading with very minimal risks.
#15 - February 10, 2019, 09:03:16 AM

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