spreadbet unique money managent

[oilfxpro]

Here is unique money management for spreadbetting with £50,000 account.

 

stop loss 32.5 

 

What is your view?

 

for first 4 trades position size  gbp 4   risk £520

after 4 losses next  4   trades position gbp 8 

 after 8 losses next  4   trades position gbp 16 

after 12 losses next  4   trades position gbp 32 

after 16 losses next  4   trades position gbp 64 

 

 

 

[Situation]

You are increasing position size when you lose. Doesn't make sense. Would not recommend to anyone.

[Ian_944]

It is a martingale system. You will go broke.

[oilfxpro]

It is not martingale, martingale requires a doubling of size, immediately after a loss .This method places bigger bets  after 4 losses.This is different.

 

If you apply The losses of £15,000 approximately  on a £100,000 account, this is no different  from ordinary traders who lose  15% within 7 trades .

 

This money management allows you to go through 20 losses, before you lose 15 %.Most new traders  will make mistakes and experienced traders also make mistakes, so losses are inevitable.Those who practice this type of money management are likely to last longer, and in the long run be profitable every years.

 

BTW  this money management is applied selectively on high probability systems, with a 75 % success rate.

[oilfxpro]

TF

 

I use it , after about 4  losses , I  can get get most of my losses back.In worst case scenario, 12 losses will still only lose <10% , £7800 loss  out of £100k , is comfortable risk taking., considering it generates about £50k a year.

[oilfxpro]

Dow and dax using several strategies.dow dax have repeatable patterns.

 

It would not work well for other instruments.systems.methods.forex

[Ian_944]

It is a martingale system. The definition of a martingale system is one where bet size is increased exponentially in the event of losses, which is what you show above. That you have tweaked how frequently you double bet size is irrelevant to the definition. I would strongly recommend anyone considering this strategy to first understand the underlying math. Wikipedia has decent background.

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oilfxpro wrote:

It is not martingale, martingale requires a doubling of size, immediately after a loss .This method places bigger bets  after 4 losses.This is different.

 

 

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[oilfxpro]

I do not reccomend it to anyone.as any new trader will get the false confidence .that it can make money by avoiding lossess.Secondly after a string of losses, most traders start trading their emotions with revenge trading , to get instant loss recover gratifications.They may messup anway, without this mm , that I am experienced and have the mental skills .which other traders may not have to run this

 

[oilfxpro]

The traditional 2% money management is actually a farce, taught mainly by charlatan educators who don't trade and don't know enough about trading..This includes all  the gurus who write books for a living, these charlatans don't know about the reality of the markets and trading.They have never done it successfully. I will explain to you why.

 

Most beginners will make mistakes and mistakes make losing traders. New and experienced traders will make mistakes, they will reduce a 50 % hit rate system to around 25%, if there are 10 wins and 10 losses in a system, some traders will increase their losing trades to 15 out of 20. At 2% risk per trade, the traditional 2 % risk will reduce a £100,000 balance to approximately £76,000.The loss will be £24,000,  compared to  the so called martingale strategy which will lose around £8,000.

 

This is why I have absolutely no trust or faith in charlatan mentors and educators.Most traders will make mistakes and mistakes make losing traders.Your back tests are conducted by the rational brain, your trading is done by other parts of the brain, you have to understanding trading psychology to understand this, most traders are clueless about psychology. Psychological mistakes are never  back tested and most back testing is useless.

 

Mistakes make losing traders

 

http://www.trade2win.com/boards/educational-resources/223432-mistakes-make-losing-traders.html

 

http://www.vantharp.com/tradersandmistakes-pt1_2_3.htm

 

 

Most back testing is useless

 

http://www.trade2win.com/boards/educational-resources/223150-most-back-testing-useless.html

 

 

 

 

[oilfxpro]

Here is actual 2% rule calculations, maybe this rule should be changed to 0.5%  per trade.

 

[oilfxpro]

If anybody wanted a bit of free advice, forward test on a demo account with I G , for a period of at least 1 year.This will help develop subconscious competence in a simulated environment. These are the real skills i.e mental and cognitive skills on how to tackle the real market.They just need to deposit £250  and get unlimited demo practice.