immy wrote: 24 Sep 2021, 19:02
Risk and Trade Management
Example based on Prop Firm Challenge of Account Size of $50,000
Account Profit Target: $5000 (10%)
Account Maximum Loss: = -10% (-$5,000)
Daily Stop Loss: $2500
Total Risk at any point in time?
Take all the signals that appear during the day but take only 3-4 signals per session.
How much to risk per trade?
Risk Per Trade should always be 1%. (NEVER LESS - NEVER MORE)
Daily Stop Loss:
The daily Loss Limit is $2500 so don’t go more than 4 Loss trades per day.
Where to Setup up Target Points:
Always set a 2R Target Point. No questions asked. No need for 3R etc.
How to Manage Trades: (Simple = ATM Does it)
Stop Loss -1R (Range of Candle)
BreakEven: Move SL to BE at +1R
Target Point:
> If Stop Loss is less than 1ATR then go for 2R Target.
>>If Stop Loss is more than 1ATR then go for 1ATR which is the 1R target.
>>> If Entry is based on a tight Micro Pullback then go for 1:1 or 1:1.5 Target.
Once I set Target 2R I will not touch trade once entry is made.
Here is another Trick I do to gain more profit
When you can find a SEED or a signal that is less than 1ATR or say its less than 10 ticks for DAX M1.
Always go for 3R in this situation.
Aggressive but Effective Risk Management Technique to Win Funded Traders Prop Firm Challenge
Asymmetric Compounding Method
Target is 8% or 10%.
The chances of 2 Consecutive Win Trades are pretty high on this system.
The chances of hitting 3R winners are always pretty good.
Here is how to do it.
Risk Per Trade
We will risk 1% or 4% per trade depending on the result of the last trade.
Target Points are always 3R
Risk Per Trade is Dynamic and dependent on the result of the last trade.
Step 1: Risk 1% on First Trade
Step 2a: If first trade is winner, Risk 4% with 3R Target on Next Trade
Step 2b: If the first trade is loser Risk 1% with 3R Target.
Step 3: If the next trade is a loser, Risk 1% with 3R Target.
Step 4: If Last Trade is Winner Risk 4% with 3R Target.
Target Point: Target Always 3R. Win on 1% Riks is 3% but Win on 2nd Winner is 12%. Boom
Stop Loss to BE: Move the Stop loss to BE at 1.5R profit or 2R Profit.
Win FTMO Challenge within 2 Trades.
Here is how One trader who does not like to be named won a 250K account.
An example is taken from his trades based on a 50K account
https://www.screencast.com/t/lNf0HBs4xw
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Alternative Version (0.5% - 2%)
If your broker or prop firm does not allow a 4% position (become lot size gets bigger) then you can use the following solution
Divide the Risk percentage by 2.
Risk per trade: 0.5%
Risk after 1 winner 2%.
Now let's say you win a trade, you're now up 1.5%.
The next trade will be taken with 2% risk. If you win the next trade, you are now up 6%.
If you lose the next trade, you'll be own 2%. So in total, you're now up (1.5+6-2 = 5.5%)
Since you've lost the last trade, now you will come down to 0.5% risk per trade.
Say you lost this, now you're down to 5%.
Now say you lost two more, you're now at 4% total wins.
suppose the next two trades are winners
On first trade, you've gone in total to 5.5% and then a 6% winner and you're up 11.5% and your challenge has been won.
(Edit 10/2/2022)
Also Check this calculation based on actual trades. (3R targets are assumed) 2R is real.
I have calculated alternatives. What happens if you use a 0.5%-2% model with 2R targets and then 3R targets. Which one wins?
