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Thread: Winning Strategy (Secret of Success Through Money/Risk management)

  1. #1
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    Winning Strategy (Secret of Success Through Money/Risk management)

    I have being wondering within myself the main reason why traders are losing too much money in the market, and all that comes to my mind is the fact that traders are not engaging in the proper money and risk management when they trade the market. The market is so risky, it is not a place we should be gambling our money, it is the seriousness of traders that will help them to be successful. The issue with most traders is never the lack of the good trading strategies that most traders are insinuating upon, because if you asked a fellow trader the strategy he or she is using, they will tell you that it is strategy A or B or C etc..., and when you check that strategy, you will realize that it is such a strategy that is working with more than 75%. Now tell me, what else does any traders need as strategy when they already have 75% winning strategy, but yet they are losing? So, money and risk management has to be well calculated and monitored if traders will want to be successful.


    Analysis and Calculations: Let us assume that a trader has a winning strategy of 75% and a capital of $500. And the trader is using money and risk management of 10% and 1:2 respectively. Also, let us assume that the trader equally use stop loss of 50 pips and take profit of 100 pips. However, when the trader makes 20 different trades, then the follow calculation below applies:

    Number of trades: 20 trades

    Percent of winning strategy: 75%

    Number of winning trades: 15 trades

    Number of losing trades: 5 trades

    Money management: 10% {The trader will risk only $50 per trade}

    Risk management: 1:2

    Pips value for winning: 15 trades x 100 pips for winning x 2 for reward = 3000 pips

    Pips value for Losing: 5 trades x 50 pips for losing x 1 for risk taking = 250 pips

    Total profit = 3000 pips for winning - 250 pips for losing = 2500 pips.



    Can you imagine this big value (2500 pips) of profits with just a simple calculation and 75% winning? This is to show the extent at which traders are missing when they are pursuing the best strategies all round, whereas it is the money and risk management they supposed to focus upon. I put this together for traders to have their eyes opened and outsmarts the market with this simple calculation.

    However, emotion is another cause of failure, just make sure that you do not allow emotion in your trading. Be serious and be disciplined, and before you know it, emotion will vanish away. Because, if you allowed emotions, all this plans i explained above will not be used accurately by you, and you will still be losing in the market.

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  2. #1601
    Trader Senorita's Avatar
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    Before thinking about winning, you must first think about protecting your investment in forex because this would give you the opportunity to make it in forex. A winning secret is ensuring that you have a better risk to reward pattern that can help you survive the hard times in forex. We must learn how to manage our investment and seek on the opportunities to build a strong winning system that would help us out.

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  3. #1602
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    Money and risk management is one of the main things in forex market. Trader has to minimise his risks as sometimes the market can move against him and he can have losses. If trader uses bad money and risk management so he can lose big money and it will be very difficult to recover from losses. It is better to trade slowly with less risk and less profits.

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  4. #1603
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    It is very good for trader to be used money and risk management in all of our trade because without better planing and learning about it we never gain success , so every trader must give time to learn about it practice on the demo account so it will be helpful for trader to chose the best strategy and work withit .

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  5. #1604
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    It is true with the help of good learning and management skill we are able to make our trade plan very well in which we have faced minimum risk , i always prefer to trade with the proper risk and money management because it is a one major reason which will give trader opportunity to work safely .

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  6. #1605
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    We can win maximum chances of winning success is we have the good skills to manage the money and the risks so we should to keep in the control the risks which is an important aspect to became the successful trader in this market so work with patience and good time to dedicate on the market for practices matters to wins success .

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  7. #1606
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    Consistent winning has to do about a lot of things, first we have to trade according to a strategy and not trade when we actually shouldn't. Some traders as I see try to open and close several trades everyday but that is not the right approach that we should take in this business. Risk has to be planned well and above that the plan has to be followed without getting greedy and emotional.

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  8. #1607
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    Money and risk management is key factor to traders success and all traders must repect the rules of money management. Exeprienced traders know the importance of money management but new traders think that they are better and more clever. They try to use big size lots and sometimes they win but in most cases they lose money.

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  9. #1608
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    Money and risk management are part of success this basics aspects make it possible for us to achieve success in this market very easily, if we have a strong strategy but lack a better understanding about risk and money management we still can't achieve success until we learn to implement risk and money management properly.

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  10. #1609
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    I see that money management become the foundation for traders to implement the trading strategies properly, this is really helpful and useful to control the risk and make realistic target. Good skill to analyze the market and get the right timing is not good enough before we sustain it with proper money managements and reasons here that many traders got losing because low managements at their trading forex and include my experiences when ignored the money managements then just loses at my hands.
    So good to use low risk per deal that give us better chances for trading and the important thing here that we are discipline and patient

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    Last edited by mr.big; 07-01-2019 at 07:13 AM.

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