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Money management strategies- what is better?


ellliottt

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Hi

 

I am trying to define which of the following two major strategies is better:

 

1. Using a system with medium winning rate (lets say for the example, something around 40%), with a high TP/SL rate (for the example, 3:1).

2. Using a system with high winning rate (lets say over 90%) with low TP/SL rate (lets say 1:8).

 

The first is the traditional way of manual traders, and the second is familiar with robots.

 

I would like to hear some opinions about it, which is better and why?

 

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  • 11 months later...
  • 3 months later...

Considering the problems associated with the use of EAs also known as robots makes the manual trading better. With manual trading, a trader has full control over the trade and a trader does not need to wait for the EA updates before trades can be placed. With the manual trading, a trader needs experience which is acquired over the years.

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I prefer manual trading versus robots. I don't do well with robots and will not do robots. Also, Robots have limitation. We as human are so much better than robots. I think if you learn how to trade you will make more money than bots do. Bots are expensive but they don't really help us earn that much. I prefer trading on my own. Also, you should learn to manage all aspects of trades as that will make you a successful trader. Forget about using expensive bots. 

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the point to set good money management is traders not risking high margin per trades. traders should aware with chance to loss and so, need to protect their capital to not suffering big decrease when they are get loss in trading. small margin lead traders to get small profit. but at least, not make traders get high capital decrease when loss in trades.

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i think the second one is better...winning rate is very important...if you win more you will make more profit than others...small profit is better than loss...so, accept small profit and don't blow up your account....keep increasing slowly...in this way you will get a big capital at the end of the year...always try to trade a smaller lot size...

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The real reason behind money management is that the trader adopts that which he thinks fits best for him. It doesn't necessarily lie on a fixed form of it. But then, o believe a lot in risking a small portion of your capital at a time, and also, ensuring the use of stop loss.

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set risk tolerance or risk management base on strategy ability. if traders found the strategy generate low percentage of profit, they'll choose to trade conservatively in trading. while if traders found strategy have high profit percentage, become moderate and sometimes take aggressive approach wouldn't be harmful to them.

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  • 3 weeks later...

well, i have different calculation regarding with risk management. I am not use risk reward ratio but always tried to make capital able to cover 1000-2000 pips losses. I am not use 1% capital per trading but even lower than that. make capital accept many pips losses enabling me to keep trading though previously suffering some of losses.

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  • 2 weeks later...

Also, an accurate use of the stops is something that is quite essential to any trader. Money management is more like a protection tool to any trader and is responsible for a traders cautious attitude to Forex. There are many means a trader can manage and protect his money and one of them is by using the defensive tools.

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Well money management is really important for trader's while they are trading it depends in my view on the availability of more funds to a trader and he uses his funds to trade seeing his own situation talking about the thread answer I think the first strategy is more better than the second one.

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money management is very important in forex trading. Because  with good money management, trading then we will last longer in forex. We should be able to take into account properly, how the leverage to be taken, our capital, the lot will be taken, so that the capital we will not run out quickly and profit we can get.

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Money management is good for every of the trader that wants to be making money in the forex trading. The trader should not be using high margin when they want to trade in other not to be having huge loss. If the trader wants to make big money in forex he or she should have big capital instead of trading with high margin because it will make them not to be able to control their capital.

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  • 6 years later...

As per my view, money management strategy is the number one strategy in Forex market cause if you can keep money on your trading account then the possibility of gaining is 99 percent but in this scenario make sure you keep your money on a safe broker like FreshForex or any instant deposit type broker. 
 

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