Money Management Rules

June 13, 2006 by Trader Rich

Forex2Stay has a very good blog post on Money Management. He has posted on this site before and uses the following formula to determine the size of a given trade:

S=(e*r) / (p-x)

Where:
S = Size of trade
e = portfolio equity(Cash and holdings)
r = maximum risk percentage per trade
p = entry price on the trade
x = pre-determined stop loss or exit price (based on TA)

Read the rest of his post at http://forex2stay.blogspot.com/2006/06/money-management.html

He mentions one gentlemen he met that makes money management his top priority and I checked out his site. He has some great stuff here: http://members.aon.at/tips/moneyMan.htm

I already like what I'm reading. Fear. I have fear of letting my winner run. I packaged these Money Management pages into a PDF.

Forex Money management 13/06/2006,10:03 960.08 Kb