BUILDING SMALL ACCOUNTS WITH MONEY MANAGEMENT

MONEY MANAGEMENT FOR MINI ACCOUNT DAYTRADERS

This article is a reprint of an article I wrote a while ago while keeping statistics on trade call I was making at the time. I am posting it here as there are many new members to THE LAWS OF CHARTS AND MEN who can benefit from some suggestions made here.

I have touched with you a little on trade management. There is something that goes hand in hand with trade management and that is money management.

When you look at the trade results I posted you may think that you can’t do a lot with that trading a mini account. Well, let’s see.

We will use our last 5 live trade calls and add contracts to each winning trade and subtract an equal number of contracts from losing trades.

In the end, you will see how a realistic profit of 1700 pips can be gained over a one month period, while risking only $16 dollars of your initial account balance, with an average winning trade of 23 pips.

This is the true power of LCM. The power to keep your risk/stops small while still providing a very high win rate.

1ct X +25 pips + 25 pips

2ct X+22 pips + 44 pips

3ct X+ 43 pips + 129 pips

4ct X+23 pips + 92 pips

5ct x+7 pips + 35 pips

TOTAL 325 PIPS


STOP INITIAL CAPITAL RISKED

1. 16 PIPS 16 PIPS
2. 20 PIPS 0 YOUR NEXT STOP IS WITH HOUSE MONEY
3. 23 PIPS 0 YOUR NEXT STOP IS WITH HOUSE MONEY
4. 36 PIPS 0 YOUR NEXT STOP IS WITH HOUSE MONEY
5. 38 PIPS 0 YOUR NEXT STOP IS WITH HOUSE MONEY

NOW YOU HAVE EARNED 325 PIPS WHILE RISKING ONLY 16 PIPS OF YOUR INITIAL INVESTMENT…OR DOUBLED A $300 MINI ACCOUNT.

THEN, ON YOUR NEXT CYCLE OF TRADES YOU CAN START WITH 2 CTS INSTEAD OF 1 AND ADD 2 ADDITIONAL CONTRACTS AFTER EACH WINNING TRADE AND IT WOULD LOOK LIKE THIS;

2ct X +25 pips + 50 pips

4ct X+22 pips + 88 pips

6ct X+ 43 pips + 258 pips

8ct X+23 pips + 184

10ct x+7 pips + 350 pips

TOTAL 930 PIPS + 325 PIPS ON FIRST CYCLE = 1255 PIPS

THIS IS NOT AS FAR FECTHED AS IT SOUNDS BECAUSE LCM CAN ACCOMPLISH 10 WINS IN A ROW OVER A 2 WEEK PERIOD INTRADAY.
SO NOW WE GO INTO A 3RD WEEK OR CYCLE OF 5 TRADES


NEXT CYCLE START WITH 3 AND ADD 3 TO EACH WINNING TRADE

3ct X +25 pips + 75 pips

6ct X+22 pips + 132 pips

9ct X+ 43 pips + 387 pips

12ct X+23 pips + 276

15ct x+7 pips + 105 pips

TOTAL 930 PIPS
+ 1255 PIPS ON FIRST 2 CYCLES = 2185 PIPS


Now To the 4th or End Of the Month Cycle
Start With 3 and Add 3 to Each Winning Trade

4ct X +25 pips + 100 pips

You get the Idea.

Cheers,Jerry

jerry@forextradingmajic.com

tradingmajic1@gmail.com