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Hi Thank you for answering the questions in module 2 We are now ready to move onto module 3: 1 Basic risk reduction concepts 2 The calculation of maximum lots and splitting of trading capital 3 3 strategies for using maximum lots with examples We hope you are enjoying the course and look forward to your feedback. Kind Regards Expert4x |
Techniques for employing using the maximum lot technique. Basic technique The basic technique already discussed in this course is: 1 To split your capital and trading funds 2 Use the maximum lot trading approach 3 Transfer funds to your capital account once your trading account has doubled (+100%) 4 Transfer funds to your trading account once your trading account has reached +/- 20% of its original balance due to losses. 5 Use a following stop to reduce losses 5% basis The 5% technique is based of your trading account being 5% of your total risk money. The balance would then be in your capital account. This is a conservative approach but one that will ensure a long trading career. 10% basis The 10% technique is based of your trading account being 10% of your total risk money. The balance would then be in your capital account. This is a less conservative approach. One would have to have a reasonable good trading success rate of between 60% to 70% to adopt this approach. Increasing % method after a number of successes. Once you have achieved a number of successful 100% transfers to your capital (Say 4) it would be appropriate to increase your % which makes up your trading account. If you were using the 5% strategy then increase it to the 10% basis. If you were using the 10% basis increase it to the 15% basis. Overall philosophy The overall philosophy is that you will only increase your capital very slowly if you traded the same number of lots per trade or the same % of your capital. By using the maximum lot methods you can increase your capital dramatically without exposing your total capital to excessive risk. QUESTIONS AND COMMENTS Please use this facility to ask any questions or make any comments regarding this course. |