Formulas of Money management

[Alexander K.]

Hi,

In the near future we shall add in strategy of the formula of management by the capital. If you have unique formulas, write its in this theme, at them we shall look.

Thanks.

[gumpat]

Money management alternate routine:
1: Check number of (minimum lot order size trades) which does not exceed (2%) risk per trade or (20%) for all open trades.
2: If last trade was a loss, increase number of lots by one.
3: If last trade was a winner, decrease number of lots by one.
4: Never drop below minimum trade of 1 minimum lot.
Make items in brackets available so user can select at startup.
This makes a 50/50 system profitable.

[Alexander K.]

Originally Posted by gumpat

Money management alternate routine:
1: Check number of (minimum lot order size trades) which does not exceed (2%) risk per trade or (20%) for all open trades.
2: If last trade was a loss, increase number of lots by one.
3: If last trade was a winner, decrease number of lots by one.
4: Never drop below minimum trade of 1 minimum lot.
Make items in brackets available so user can select at startup.
This makes a 50/50 system profitable.

We now prepare for release for new version Forex Optimizer 2.8
Version Forex Optimizer 2.8 will have many opportunities
After release of version 2.8 we shall add this formula in patterns of strategy

Thank you.

[FinGeR]

MoneyManagement by L.Williams
Anybody tried out Larry Williams MM formula as described in his book "Long-Term Secrets for Short-Term Trading"

(Account Balance x Risk Percentage) / largest loss.

Helps control drawdown while simultaneously allowing safer compounding. He says that once you get over 13% on the risk percentage, "...drawdown increases faster than the increases in profit."


try MQL4 code

extern double     Lots            =   1;
extern double     MMRisk         =  0.05;  // Risk Factor
extern double     LossMax        =  3200;  // Maximum Loss by 1 Lot

void start()
{

double Lotsi = MoneyManagement (Lots, MMRisk, LossMax);

}


//----------------------------------------------------------------

double MoneyManagement (double Lots, double risk, double maxloss)
{
   double MinLots=NormalizeDouble(MarketInfo(Symbol(),23),2);
   double LotStep=NormalizeDouble(MarketInfo(Symbol(),24),2);
   double MaxLots=NormalizeDouble(MarketInfo(Symbol(),25),2);
   int LotDigit;
   if (LotStep==1) { LotDigit=0; }
   if (LotStep==0.1) { LotDigit=1; }
   if (LotStep==0.01) { LotDigit=2; }
   double Lotsi=Lots;
   double MAXloss=maxloss;
   Lotsi=NormalizeDouble(Lots*AccountEquity()*risk/MAXloss,LotDigit);   
     
   if (Lotsi<MinLots) Lotsi=MinLots;
   if (Lotsi>MaxLots) Lotsi=MaxLots;   
   return(Lotsi);
}   

[aspardeshi]

Dear Alex,

Following are the important things which I feel needs to be added to money management.

1. count of number of open orders making loss.
2. Total value of loss.
3. count of number of open orders making profit.
4. Total value of profit.
5. There should be one variable in which we should be able to store any value like Last days open or todays lowest, or average of first 10 bars of the day of any timeframe etc etc..... and compare that variable with current values at the time of trade.

If you integrate this in new version, I think gordago will be the most powerfull software ever made.

[aspardeshi]

Dear Alex,

We also need the program to hold for certain period of time after each trade. this facility can be made available in the new version. Like if I trade on EURUSD 15 min timeframe and if I say wait 60 then after the trade is made the program should wait 60 (minutes or seconds should be provided for user input)

Regards

[aspardeshi]

Dear Alex,

Following things also may be added to Account Management.

1. Largest loss value and entry pip of loss trade.
2. Largest profit value and entry pip of profit trade.

Regards,

[FinGeR]

this is Ok

[greenrun]

Originally Posted by Alexander K.

Hi,

In the near future we shall add in strategy of the formula of management by the capital. If you have unique formulas, write its in this theme, at them we shall look.

Thanks.

The right formula is just one - risk 2% !

[LookSukasese]

Wow thats really interesting. Thnx for sharing.