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forex1 · 18-01-2003, 08:17

For attention TC, but all feedback and debate welcome.

1. Trade management when trading multiple lots

If you trade only 1 lot it is easy to minimize your risk but difficult to let your profits run. It is very tempting to take profits too soon or move your stop loss too close too soon – and in the end you get the risk/reward ratio all wrong. So I’m trying to find a method to trade 2 lots in a way that I find myself in a risk-free trade as soon as possible. (I accept of course that at the time of entering the trade one’s risk is bigger unless you half the pips you were willing to risk on 1 lot, but that would probably put you initial stop loss too close).

Here’s what I have in mind – can you please comment on the feasibility of this approach in conjunction with your trade recommendations. The pip movements mentioned below are specifically with $/CHF in mind and the spread is included everywhere.

Enter the trade with 2 lots; stop loss 25 pips, so at this stage your max loss is 50 pips.

Take 15 pips profit on the 1st lot as soon as you can and move the stop loss on the 2nd lot 25 pips from the current price. At this stage you have effectively locked in 5 pips and the trade is risk-free because if the market now turns around and your 2nd lot gets kicked out, you make an overall profit of 5 pips (+15 on the 1st and –10 on the 2nd).

This leaves the trader in the relatively stress free situation of being able to maximize his profit on the 2nd lot knowing that he can’t lose anymore.

Does this approach make sense on your trade recommendations or can you suggest something else?

2. Money and risk management on $10,000 capital

The next question follows on from the previous issue of trade management - how does one double $10,000 in one month? Probably not by trading 1 lot? Let’s assume we have a winning system catching some good intra-day trends (with its fair share of losing trades). How many lots do you trade on a $10,000 account and how much do you risk per trade in order to minimize losses and maximize profits in the long run – and take $10,000 to $20,000 in the shortest space of time?

All members please feel free to share ideas, advice and experiences (good and bad!) regarding trade, money and risk management.

18-01-2003, 08:17	#1 (permalink)
forex1 Trader Join Date: Jan 2003 Posts: 250 Rep Power: 0	Trade, money and risk management For attention TC, but all feedback and debate welcome. 1. Trade management when trading multiple lots If you trade only 1 lot it is easy to minimize your risk but difficult to let your profits run. It is very tempting to take profits too soon or move your stop loss too close too soon – and in the end you get the risk/reward ratio all wrong. So I’m trying to find a method to trade 2 lots in a way that I find myself in a risk-free trade as soon as possible. (I accept of course that at the time of entering the trade one’s risk is bigger unless you half the pips you were willing to risk on 1 lot, but that would probably put you initial stop loss too close). Here’s what I have in mind – can you please comment on the feasibility of this approach in conjunction with your trade recommendations. The pip movements mentioned below are specifically with $/CHF in mind and the spread is included everywhere. Enter the trade with 2 lots; stop loss 25 pips, so at this stage your max loss is 50 pips. Take 15 pips profit on the 1st lot as soon as you can and move the stop loss on the 2nd lot 25 pips from the current price. At this stage you have effectively locked in 5 pips and the trade is risk-free because if the market now turns around and your 2nd lot gets kicked out, you make an overall profit of 5 pips (+15 on the 1st and –10 on the 2nd). This leaves the trader in the relatively stress free situation of being able to maximize his profit on the 2nd lot knowing that he can’t lose anymore. Does this approach make sense on your trade recommendations or can you suggest something else? 2. Money and risk management on $10,000 capital The next question follows on from the previous issue of trade management - how does one double $10,000 in one month? Probably not by trading 1 lot? Let’s assume we have a winning system catching some good intra-day trends (with its fair share of losing trades). How many lots do you trade on a $10,000 account and how much do you risk per trade in order to minimize losses and maximize profits in the long run – and take $10,000 to $20,000 in the shortest space of time? All members please feel free to share ideas, advice and experiences (good and bad!) regarding trade, money and risk management.