What is the best Money management system

[themickey]

....Based on past experience, some models work better than others during certain time frames and markets. If the market at any particular time resembles a past event when you viewed an occurrence, you can look to replicate that. The more accurate that was in the past, the more apt that is to work in the future. You are trying to place the odds of success in your favor.....

I reckon this must be an American sentiment as I see it on Marketwatch time and again where they compare something today with something in the past, then attempt to copy over a similar methodology which worked back then.
Personally I think such a method of trading is crazy.
Sorry Robert, usually I'm in agreement with much of what you say, but looks like not in this thread.

 

[pipeguy]

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?

cut losses short, let profits run. Always use stop losses. A variation of this two rules I use in my trading with Hotforex. I also use automated version of this (placing stops and tp automatically because my style is scalping).

 

[WealthSignals]

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?

It depends on your system's profile to give out a general advice. In any case you would want to backtest it. Just for example, here's how we backtest the pyramiding-like position sizing techniques in Wealth-Lab:

Increase/decrease size on runup/drawdown
Pyramiding PosSizer

-Eugene

 

[easymon1]

increase the size of our position when we lost

this up top may be what you discribe.
good to invest some time on this topic.
let us know what you decide. cheers
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https://en.wikipedia.org/wiki/Martingale_(betting_system)
"Since a gambler with infinite wealth will, almost surely, eventually flip heads, the martingale betting strategy was seen as a sure thing by those who advocated it. None of the gamblers possessed infinite wealth, and the exponential growth of the bets would eventually bankrupt "unlucky" gamblers who chose to use the martingale. A martingale is any of a class of betting strategies that originated from and were popular in 18th century France."
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unless and until you find something better, this ain't half bad...

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chapters 4, 5 & 6 might be worth a browse...
https://elitetrader.com/et/threads/fixed-ratio-position-sizing-money-management.303441/#post-5012086

 

[Coner1980]

I am trading with 2% risk and still, it is working for me.

 

[ionone]

cut losses short, let profits run. Always use stop losses. A variation of this two rules I use in my trading with Hotforex. I also use automated version of this (placing stops and tp automatically because my style is scalping).

to cut losses early, you need really good entries. otherwise you'll cut short every good entry with the others. not easy
I prefer some slack in the closing time
SL should never be hit, it's just there for capital protection

 

[easymon1]

to cut losses early, you need really good entries. otherwise you'll cut short every good entry with the others. not easy
I prefer some slack in the closing time
SL should never be hit, it's just there for capital protection

what timeframe charts, hold durations do you like? Thx

 

[ionone]

what timeframe charts, hold durations do you like? Thx

timeframe is irrelevant, except when you add spread (and except M1 surely).
on higher TFs you need a smaller edge, because trades are bigger : more profits means less spread relatively.
you gotta test your edge on every TF with zero spread, then add spread, and higher your TF until in profit, because spread will eat all profits on smaller TF (too many small trades)

 

[easymon1]

timeframe

you have no preference? any timeframes that you trade more frequently than others?

 

[Coner1980]

Money management is like the “elephant in the room” that most traders don’t want to talk about. It can be boring, embarrassing, or even emotionally painful for some traders to talk about risk and capital management, because they know they aren’t doing it right.