What is the best Money management system

Aline86 said:
Hello there, would like to know what is the best money management system while trading, is it better to increase the size of our position when we lost in order to recover quickly our losses or decrease the size?
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money management and risk management are good! it can help our account to reach consisten profit! but without and edge! or understand how market works! you cant sleep well at night:D Ideally 5% with RR 1:3, it can keep your DD level under 10%, even if you winning rate only 50:50 for long run you still make profit! but again, without knowing how market works, you can reach RR 1:3 or even 1:4 or 1:5
 
There’s a lot more to money management than just buying or selling on your signals, or increasing lot sizes.

Risk to reward.
Where to most effectively place your stop.
Exit strategy.
Configuring lot size to r/r…
On and on…
 
smallfil said:
Risk no more than 2% on any given trade. If you have a small amount like $1,000, divide that by 20 or $50 per trade. You are risking 5% of your capital per trade. That is still a lot and you can still blow up and lose that $1,000. Take no more than 3 trades. You are risking 15% of our total monies on a worst case scenario of losing all 3 trades. Do not double down and risk more because you lost monies. You will lose monies trading which you should be able to accept. This is what matters, your gains when you win should be multiples of our losses. Say, you place some trades and win 30% of the time but, each time you make $250 back on each $50 you risk. When you lose, you lose $10 each trade. So, in 10 trades, you lose 7 times for a total of $70 but, in 3 trades you win $200 each time in profits. When you sum it up, you won $600, lost $70 for a net gain of $530 despite, winning only on a 30% clip.
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Thanks for your information. I think it's very helpful for me.
thank you.
 
MR Harrist said:
money management and risk management are good! it can help our account to reach consisten profit! but without and edge! or understand how market works! you cant sleep well at night:D Ideally 5% with RR 1:3, it can keep your DD level under 10%, even if you winning rate only 50:50 for long run you still make profit! but again, without knowing how market works, you can reach RR 1:3 or even 1:4 or 1:5
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its a good calculation , by the way do you feel any difference about money and risk management ?
 
If you're an experienced and disciplined trader using a smaller bet size on average, I think doubling down can work just fine.

If you're a newbie and/or trade with a very high risk profile initially, it's usually a recipe for disaster (read: compounding your losses and blowing up).
 
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