## Never Lose Again

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disbellj
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### WARNING ABOUT INDICATOR MONEY MANAGEMENT

TRO (Avery), WE GOTTA TALK ABOUT THE MONEY MANAGEMENT YOU GOT IN THAT MM INDICATOR, MAN!

I would urge you to change to using my money management and just setting it to 5 as the risk instead of 2, because dragon33 said I was correct when I figured he risked 5% per trade. This indicator is actually risking 50% per trade if someone uses it! The money management equation is just wrong. Let's look at it:

ACCOUNT BALANCE
500

RISK (PERCENT)
2

STOP LOSS (PIP)
20

PIP VALUE PER LOT
10

LOTS: INDICATOR MM = ACCOUNT BALANCE / (STOP LOSS X PIP VALUE PER LOT X RISK) (money management equation in indicator)
LOTS: INDICATOR MM = 500 (account balance) / ( 20 (stop loss) x 10 (pip value per lot) X 2 (risk) )
LOTS: INDICATOR MM = 1.25 (1 STANDARD LOT, 2 MINI LOTS, & 5 MICRO LOTS)

First, in inputs, myMultiplier1 is 10, and I see that it refers to TickValue. myMultiplier2 is 2, and I see that it refers to risk percent. This is at least what I ascertain, since it is vague description, but I will assume i am correct from looking inside the indicator.

LET'S CHECK THE MATH TO SEE IF WE ARE REALLY ONLY RISKING 2%, SHALL WE?

\$ TO RISK = ACCOUNT BALANCE X (RISK/100)
\$ TO RISK = 500 (account balance) x (2/100) (risk percent)
\$ TO RISK = 500 x .02
\$ TO RISK = 10

HOW MUCH ARE WE RISKING WITH THE MONEY MANAGEMENT EQUATION IN THE INDICATOR?

FIRST, WE'LL DEFINE THE EQUATION TO USE TO CHECK:
STOP LOSS X PIP VALUE PER LOT X NUMBER OF LOTS

SO

\$ ACTUALLY RISKED = 20 (stop loss) x 10 (pip value per lot) x 1.25 (number of lots picked by money management equation in indicator)
\$ ACTUALLY RISKED = 250
% ACTUALLY RISKED = 0.5

RISKING 50% ONE ONE TRADE?!?! THAT'S 25 TIMES THE 2% ASSUMED TO BE RISKED IF SOMEONE USES THE INDICATOR!

PLEASE, USE MY MONEY MANAGEMENT EQUATION. WE'LL CHECK THE MATH ON IT TO SHOW IT PICKS THE RIGHT NUMBERS OF LOTS THE USER SHOULD TRADE, GIVEN THE USER'S ACCOUNT BALANCE, USER-DEFINED PERCENT TO RISK, USER-DEFINED STOP LOSS, AND PIP VALUE PER LOT (which is approximately \$10 - a standard lot in MT4, at least with FXDD, and mini and micro lots are after the decimal, such as 1 mini lot being 0.1, value of approx. \$1, and 1 micro lot being 0.01, value of approx. \$0.10).

LOTS: DON MM = (ACCOUNT BALANCE X (RISK/100)) / (STOP LOSS X PIP VALUE PER LOT)
LOTS: DON MM = ( 500 (account balance) x (2/100) (risk percent) ) / ( 20 (stop loss) x 10 (pip value per lot) )
LOTS: DON MM = (500 x 0.02) / (20 x 10)
LOTS: DON MM = 10/200
LOTS: DON MM = 0.05 (5 MICRO LOTS)

DON MM RESULTS FOR RISK:
\$ ACTUALLY RISKED = 20 (stop loss) x 10 (pip value per lot) x 0.05 (number of lots picked by money management equation in indicator)
\$ ACTUALLY RISKED = 10
% ACTUALLY RISKED = 0.02

NOW ONLY RISKING 2%, JUAT LIKE THE INDICATOR SAYS (or should say, instead of just saying myMultiplier2). MUCH BETTER!

Even if the user wanted to risk 5 percent, at least they could choose to do so, and they would know that the number of lots they are given by the indicator will only risk that percentage, given the account balance, chosen stop loss, and value per pip per lot.

Thank you ahead of time for reading, and I went ahead and changed the indicator and posted as DON money management instead of DRAGON money management (some posts down from this one), before someone blows their account out with a couple bad trades.

Much respect to you for wanting to help others. I just want to know and want others to know that what they think they are risking is all they really are risking.

Don Isbell

TheRumpledOne wrote:TRO_DRAGON_MONEY_MGMT

Dragon shared his money management formula.

I wrote TRO_DRAGON_MONEY_MGMT to do the calculations.

You can enter your account size or enter 0 and TRO_DRAGON_MONEY_MGMT will display the values.

MT4 version of TRO_DRAGON_MONEY_MGMT, including source code, atttached.
Last edited by disbellj on Sun Nov 02, 2008 9:48 am, edited 1 time in total.

dragon33
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### Re: WARNING ABOUT INDICATOR MONEY MANAGEMENT

disbellj wrote:TRO (Avery), WE GOTTA TALK ABOUT THE MONEY MANAGEMENT YOU GOT IN THAT MM INDICATOR, MAN!

I would urge you to change to using my money management and just setting it to 5 as the risk instead of 2, because dragon33 said I was correct when I figured he risked 5% per trade. This indicator is actually risking 50% per trade if someone uses it! The money management equation is just wrong. Let's look at it:

ACCOUNT BALANCE
500

RISK (PERCENT)
2

STOP LOSS (PIP)
20

PIP VALUE PER LOT
10

LOTS: INDICATOR MM = ACCOUNT BALANCE / (STOP LOSS X PIP VALUE PER LOT X RISK) (money management equation in indicator)
LOTS: INDICATOR MM = 500 (account balance) / ( 20 (stop loss) x 10 (pip value per lot) X 2 (risk) )
LOTS: INDICATOR MM = 1.25 (1 STANDARD LOT, 2 MINI LOTS, & 5 MICRO LOTS)

First, in inputs, myMultiplier1 is 10, and I see that it refers to TickValue. myMultiplier2 is 2, and I see that it refers to risk percent. This is at least what I ascertain, since it is vague description, but I will assume i am correct from looking inside the indicator.

LET'S CHECK THE MATH TO SEE IF WE ARE REALLY ONLY RISKING 2%, SHALL WE?

\$ TO RISK = ACCOUNT BALANCE X (RISK/100)
\$ TO RISK = 500 (account balance) x (2/100) (risk percent)
\$ TO RISK = 500 x .02
\$ TO RISK = 10

HOW MUCH ARE WE RISKING WITH THE MONEY MANAGEMENT EQUATION IN THE INDICATOR?

FIRST, WE'LL DEFINE THE EQUATION TO USE TO CHECK:
STOP LOSS X PIP VALUE PER LOT X NUMBER OF LOTS

SO

\$ ACTUALLY RISKED = 20 (stop loss) x 10 (pip value per lot) x 1.25 (number of lots picked by money management equation in indicator)
\$ ACTUALLY RISKED = 250
% ACTUALLY RISKED = 0.5

RISKING 50% ONE ONE TRADE?!?! THAT'S 25 TIMES THE 2% ASSUMED TO BE RISKED IF SOMEONE USES THE INDICATOR!

PLEASE, USE MY MONEY MANAGEMENT EQUATION. WE'LL CHECK THE MATH ON IT TO SHOW IT PICKS THE RIGHT NUMBERS OF LOTS THE USER SHOULD TRADE, GIVEN THE USER'S ACCOUNT BALANCE, USER-DEFINED PERCENT TO RISK, USER-DEFINED STOP LOSS, AND PIP VALUE PER LOT (which is approximately \$10 - a standard lot in MT4, at least with FXDD, and mini and micro lots are after the decimal, such as 1 mini lot being 0.1, value of approx. \$1, and 1 micro lot being 0.01, value of approx. \$0.10).

LOTS: DON MM = (ACCOUNT BALANCE X (RISK/100)) / (STOP LOSS X PIP VALUE PER LOT)
LOTS: DON MM = ( 500 (account balance) x (2/100) (risk percent) ) / ( 20 (stop loss) x 10 (pip value per lot) )
LOTS: DON MM = (500 x 0.02) / (20 x 10)
LOTS: DON MM = 10/200
LOTS: DON MM = 0.05 (5 MICRO LOTS)

DON MM RESULTS FOR RISK:
\$ ACTUALLY RISKED = 20 (stop loss) x 10 (pip value per lot) x 0.05 (number of lots picked by money management equation in indicator)
\$ ACTUALLY RISKED = 10
% ACTUALLY RISKED = 0.02

NOW ONLY RISKING 2%, JUAT LIKE THE INDICATOR SAYS (or should say, instead of just saying myMultiplier2). MUCH BETTER!

Even if the user wanted to risk 5 percent, at least they could choose to do so, and they would know that the number of lots they are given by the indicator will only risk that percentage, given the account balance, chosen stop loss, and value per pip per lot.

Much respect to you for wanting to help others. I just want to know and want others to know that what they think they are risking is all they really are risking.

Don Isbell

TheRumpledOne wrote:TRO_DRAGON_MONEY_MGMT

Dragon shared his money management formula.

I wrote TRO_DRAGON_MONEY_MGMT to do the calculations.

You can enter your account size or enter 0 and TRO_DRAGON_MONEY_MGMT will display the values.

MT4 version of TRO_DRAGON_MONEY_MGMT, including source code, atttached.

I risk just 5% in one trade and not 50%. I can't code like you guys are doing but it seems that everybody can change things like they want.

It is absolutely important that you don't risk half of your money in just 1 trade offcourse.

The 5% rule is not to much if you understand the tradingmethod. When you understand it it is not possible to lose 10 times in a row! That's the reason i took 5%.

When you guys adjust the rules give a brief explenation of how it works please.

disbellj
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### Re: WARNING ABOUT INDICATOR MONEY MANAGEMENT

Dragon,

I have fixed the indicator the best I can, and am posting it as DON money management instead of DRAGON money management indicator.

The equation is:
(Account Balance x Risk Percent) / (Stop Loss x Pip Value Per Lot)

I tried to get it to round down to the nearest second decimal place (micro lot), but couldn't get it to round down using decimals, so it is rounded (up if above 0.05 down if below 0.05) to the nearest second decimal place (nearest micro lot, using NormailizeDouble and two decinal places).

The number to the left of the decimal place indicates standard lots.
The number one place to the right of the decimal indicates mini lots.
The number two places to the right of the decimal indicates micro lots.
This is how FXDD shows lots in MetaTrader 4.

The indicator is using MT4's Account Balance by default. To override it to use User Input MY_ACCOUNT_BALANCE, set USE_MT4_ACCOUNT_BALANCE to False, and set MY_ACCOUNT_BALANCE to whatever account balance you want to simulate (see how many lots you'll be able to trade when you get to a certain account balance).

This should be useful for everybody. I just wanted to make suire it was right, so people don't lose money because they're risking way too much and not knowing why or not understanding it.

Don

Edit: I am removing the attachments, and updated indicator is attached further down the thread, to only have one version of TRO_DON_MONEY_MGMT indicator, and hopefully lessen confusion.

dragon33 wrote:I risk just 5% in one trade and not 50%. I can't code like you guys are doing but it seems that everybody can change things like they want.

It is absolutely important that you don't risk half of your money in just 1 trade offcourse.

The 5% rule is not to much if you understand the tradingmethod. When you understand it it is not possible to lose 10 times in a row! That's the reason i took 5%.

When you guys adjust the rules give a brief explenation of how it works please.
Last edited by disbellj on Sun Nov 02, 2008 7:46 pm, edited 2 times in total.

disbellj
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### NEW INDICATOR - MONEY MANAGEMENT

I'm attaching an update. I've added the actual value per pip in green. This is pip value per (standard) lot x number of lots.

Edit: I removed this indicator and updated indicator in next post, which includes these changes.

Don
Last edited by disbellj on Sun Nov 02, 2008 7:33 pm, edited 1 time in total.

disbellj
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### Re: NEW INDICATOR - MONEY MANAGEMENT

Attached an update. Added Actual Account Currency risked in red. This is Actual Value Per Pip x Stop Loss (in Pips).

Don

Edit: Added ( Standard . Mini Micro ) next to number of lots to help users see that the standard lot is to the left of the decimal, mini lot is one place to the right of the decimal, and micro lot is two places to the right of the decimal. This is MT4 decimal format for displaying lots. I am removing other indicators I have attached, to have only one version, and hopefully lessen any confusion going forward. The only reason TRO's name is on this indicator is because I used his indicator he made for dragon33 as a "base" for my indicator, which is different than TRO's because many changes have been made by me.

disbellj wrote:I'm attaching an update. I've added the actual value per pip in green. This is pip value per (standard) lot x number of lots.

Don
Attachments
TRO_DON_MONEY_MGMT.mq4
TRO_DON_MONEY_MGMT.ex4
Last edited by disbellj on Sun Nov 02, 2008 7:58 pm, edited 2 times in total.

sundog
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Thanks Don, one question.. how do I modify the Pip value? Appreciate your efforts

TheRumpledOne
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Hey Don, you need to SETTLE DOWN. You need to FULLY UNDERSTAND what is going on BEFORE you start making changes. Your ASSUMPTIONS are incorrect. Best thing for you to do is focus on your OWN PORTFOLIO and TRADING. Dragon has made over 1000% in his account in 8 weeks. When you do that, then you'll have people listening to you.

I coded the indicator EXACTLY the way Dragon described his formula.

Here is my money management. The strategy i use to make a lot of money.
I know you guys buy and sell mini,micro and maybe standard lots.

My platform is much easier. I already posted a few times my platform screen.

The only thing i have to do is push buy or sell, that's it. I can set SL and TP and that is all i can do.

If you have practiced whatever strategy, you have to do some calculations. I am going to tell you my calculation for the TRO DYNAMIC SR strategy. I am able to make a lot of trades in short times, i have shown you.
My average SL is 20 pip. I can NOT make (i believe in myself)10 losers in a row. I take 10 times 20 pips is my max drawdown. That would be 200 pip.
Take that number and multiply by two=400. Then you take your pipvalue. Let's take 1euro (Euro zone). Now you have your starting money.

Start with 400 eur. When you lose 10 times in a row what i think it is impossible, then you still have the half of your money.

This is the best part. Every time you score 400 pip you raise your pipvalue with 1 and so on and on. So you will be able to play with 10000 euro with a pipvalue of 50 euro. If you can manage what i do you are able to make 25000 euro with just 500 pips. I have shown you can do that in just a few days. It is not luck, you have to SEE what TRO learned me to SEE.

I know some people are talking about money management and the 2% rule. I told you before if you know how to handle things and you have enough back up to believe in yourself you can create your own rules. I mean trading must working for you if not keep practicing until you do.

This method is about in and out the market as quick as you can. Other methods can't have my management rule because you will be wiped as quick as you start trading. This is working for me. If you try it it is at your own risk. The most important thing is that when you are losing: cut off asap.

This is how it will look in numbers and when you don't lose.
start 400 gain 400 pipvalue 1euro
800 400 2
1200 400 3
and so on.

About my SL. Most of it i trade without BUT i use a disaster and that is the one i set and is 50 pip. But when the market is against you and the bigger picture is not wright then i close my trade manual around -20 pip. Always put a disaster SL because when you have whatever problem you can whipped out very quick.

-Dragon

Don, please do NOT name indicators that you wrote or modify "TRO_". Name them "DON_". I do NOT want credit or blame for your work. Thanks for your cooperation.

Don, you were reading my mind when you installed the switch to use the actual account balance. I added that update.
Attachments
TRO_DRAGON_MONEY_MGMT.zip
Last edited by TheRumpledOne on Sun Nov 02, 2008 5:45 pm, edited 1 time in total.

disbellj
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TRO,

If you're not going to listen, that's fine. However, dragon33 said he only risks 5%. The indicator is risking 50% per trade. Do the math before rebuttling. I know what I'm talking about. I never said dragon33 was wrong, I said the indicator was wrong. Do the math.

Take the number of lots the indicator gives. Multiply by the pip value per lot. That's the actual pip value. Now multiply that by the stop loss (number of pips you're willing to lose). That's the amount you're risking to lose. What do you get? I get 50% of the account is what I'm seeing risked with the indicator you made.

It's something how you don't want credit or blame for my work, yet when I put in a switch to use the actual MT4 account balance, now I'm "reading your mind" (hence, you're taking credit for what I did). Nice job.

Get over yourself! Do the math to check what you're actually doing (or recommending people to do with the indicator, risk 50% of their account)! I have no reason to calm down. I have a reason to point out the problems. Even if you won't thank me, others who see the truth will. And if they don't heed or see, and follow your indicator, and lose half their account, they can have you to thank for it. I tried to help, and you pretty much shoot me down each time. That's fine. Maybe others can open their eyes and SEE.

Don

TheRumpledOne wrote:

Hey Don, you need to SETTLE DOWN. You need to FULLY UNDERSTAND what is going on BEFORE you start making changes. Your ASSUMPTIONS are incorrect. Best thing for you to do is focus on your OWN PORTFOLIO and TRADING. Dragon has made over 1000% in his account in 8 weeks. When you do that, then you'll have people listening to you.

I coded the indicator EXACTLY the way Dragon described his formula.

Here is my money management. The strategy i use to make a lot of money.
I know you guys buy and sell mini,micro and maybe standard lots.

My platform is much easier. I already posted a few times my platform screen.

The only thing i have to do is push buy or sell, that's it. I can set SL and TP and that is all i can do.

If you have practiced whatever strategy, you have to do some calculations. I am going to tell you my calculation for the TRO DYNAMIC SR strategy. I am able to make a lot of trades in short times, i have shown you.
My average SL is 20 pip. I can NOT make (i believe in myself)10 losers in a row. I take 10 times 20 pips is my max drawdown. That would be 200 pip.
Take that number and multiply by two=400. Then you take your pipvalue. Let's take 1euro (Euro zone). Now you have your starting money.

Start with 400 eur. When you lose 10 times in a row what i think it is impossible, then you still have the half of your money.

This is the best part. Every time you score 400 pip you raise your pipvalue with 1 and so on and on. So you will be able to play with 10000 euro with a pipvalue of 50 euro. If you can manage what i do you are able to make 25000 euro with just 500 pips. I have shown you can do that in just a few days. It is not luck, you have to SEE what TRO learned me to SEE.

I know some people are talking about money management and the 2% rule. I told you before if you know how to handle things and you have enough back up to believe in yourself you can create your own rules. I mean trading must working for you if not keep practicing until you do.

This method is about in and out the market as quick as you can. Other methods can't have my management rule because you will be wiped as quick as you start trading. This is working for me. If you try it it is at your own risk. The most important thing is that when you are losing: cut off asap.

This is how it will look in numbers and when you don't lose.
start 400 gain 400 pipvalue 1euro
800 400 2
1200 400 3
and so on.

About my SL. Most of it i trade without BUT i use a disaster and that is the one i set and is 50 pip. But when the market is against you and the bigger picture is not wright then i close my trade manual around -20 pip. Always put a disaster SL because when you have whatever problem you can whipped out very quick.

-Dragon

Don, please do NOT name indicators that you wrote or modify "TRO_". Name them "DON_". I do NOT want credit or blame for your work. Thanks for your cooperation.

Don, you were reading my mind when you installed the switch to use the actual account balance. I added that update.

TheRumpledOne
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disbellj wrote:TRO,Do the math to check what you're actually doing ...
Don

OK, let's do the math.

\$400 account balance.

5% risk.

20 pip stop loss.

5% of \$400 = \$20.00

So if you trade 1 minilot with a value of \$1 per pip, then you are risking \$20.00

QED.

Don, I think I understand where you confusion comes from. The TICKVALUE displayed in the original indicator is for \$100,000 lots or FULL LOTS, NOT \$10,000 lots or MINILOTS ( my mistake for thinking that was OBVIOUS). That's why I said you don't understand. So I added an input so you can tell the indicator the lot value you are using.
Last edited by TheRumpledOne on Sun Nov 02, 2008 5:56 pm, edited 1 time in total.

disbellj
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sundog,

The pip value (TICKVALUE in MetaEditor) is given by MT4, according to what it is set with your broker. For FXDD (what I use), MT4 has pip value of a standard lot.

Therefore, when I get number of lots as being a whole number, I know they are the number of standard lots recommended. When the number is one place to the right of the decimal, it's a mini lot. When the number is two places to the right of the decimal, it's a micro lot.

So, if number of lots given is 1.23, that would be 1 standard lot, 2 mini lots, and 3 micro lots that can be traded. As long as the user does not trade more lots than this, adheres to the stop loss (in pips) they set (and doesn't let it go more pips against them than that), then they will be risking no more than the percent risk they set.

It took me a long time to get the money management equation done, so thank you for taking me seriously, as this should be taken seriously.

Now, if you want to be able to set the size of contract that you're trading, in my indicator, then I would have to do more work. If others are interested, I can do it. Otherwise, just assume it to be 100,000 (a standard lot) contract size. And MT4 automatically calculates the pip value (tickvalue) from that for each pair, using different formula depending on which pair. You'll see that the pip value per lot changes when indicator is put on different pairs. This is not my formula(s) for calculating pip value, it is MT4/broker calculating pip value. It can be changed if really needed, although I don't recommend it. The pip value will change (go up) when the contract size goes above 100,000, which would be changed by a request from you to your MT4 broker, with the change made by your MT4 broker.

Don

sundog wrote:Thanks Don, one question.. how do I modify the Pip value? Appreciate your efforts