The TRUTH About Trade Management: Three common mistakes you are probably doing | FTMO
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- Опубликовано: 23 июл 2020
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Proper trade management is one of the crucial components of a successful trading career.
But how would you define a proper risk management? In our latest video, we looked at the three most common trade management tips you can find online and found out if they are worth using or not.
Let us know if you liked the video and don't forget to subscribe to our RUclips channel.
Dynamic Position Trading can be fatal! I used to do this and had suffered more absolute losses than the cumulative win! It is simply because of the random distribution of wins and losses that a trader experiences. Sticking to the pre-determined position size for a decent number of trades is highly required to be profitable in the long run.
Thanks FTMO for validating this.
Here is my opinion on going risk free on a trade.
In the end it's all about protecting capital, if the market hit my breakeven stop loss I will reanalize if I should enter the position again or not, If the pattern is still there I will reenter, if not then I will look for another opportunity. My psychology requires me to close a trade only when it starts to reject near my TP otherwise I will exit the trade breakeven and that's okay because the market provides a lot of opportunities to enter again.
Also if I target 1-1.5 like you said, I if lose 7 times in a row out of 10 times I will not be profitable. But if I target high RR, I will stay in the game for as long as I can breath.
Bonus: You only go risk free when you have structure between your entery amd where price is, meaning that structure should protect your entry. If it's broken then it means that the chance of actually losing the trade has increased, that's why I always GO RISK FREE ONLY WHEN I HAVE TO.
I love this video.. this will definitely help me going forward
Nice thank you. This is my struggle
what a glorious beard
🤣🤣🤣🤣
All those demos sold
Thank you! -Simon
I agree
Makes me jealous I had to shave mine due to safety concerns at work
Very nice video almost like you show how i trade or rather money menage.
In regard to scaling out, I think your presentation is misleading because your loss trades weren't at all affected. In reality, some trades will hit 1R or 2R before turning around and hitting your SL, so scaling out will reduce overall loss per losing trade.
Right, your win rate will be WAY higher when scaling out. The best thing to do is track every trade, track the drawdown and potential, and what you'd make if you scaled out. If they're somewhat equal in profitability, scaling out can be a lot easier on your psychology
Dear FTMO and Dear Simon
Thanks for the awesome video, but there is one problem here, in the part you talked about scaling out, in your 10 trade example, you did not consider the fact that by scaling out, the win rate will increase and that's the main reason why scaling out works, because it increases the Win rate, although it will decrease the RRR. I would be glad if you correct me if I am wrong.
What do you think about scaling in? I try to get my orignal position at break even and then open another position with less size in order to not have more exposure but do have more size to trade with?
Thank you very much..... I was thinking about this quite a lot to add to my strategy now its all clear. I'm gonna take challenge soon will meet you soon bro
And we wish you the best of luck with that.
Thanks mate
I disagree a little with the scaling out part. What if you take 30% at 1R and the rest at break even or a little less S/L? There is a possibility that that ''losing 150'' was actually a winner. It does make me think more about execution of my trades/ great video as always :)
Thanks for the video. Quite surprised to actually learn some new things which were explained with some simple arithmetic. Appreciate these constant informative videos. Excited to get started with the challenge in a few months, or potentially next year - need to brush up on my system.
Just wanted to inquire, if you are in minor loss at the end of a challenge without having violated any objectives, will the fee be paid back or is it imperative that you end with at least some profit in order to retake the challenge for free and if so, how much profit? Sorry, I know you answered this at the end of the video but I just want to be absolutely certain. Thank you very much.
We are glad that you find our content useful. There needs to be at least some profit, no loss at the end - even if it is 0.01 USD, it is enough.
I love FTMO!
4:10
Extra Bass?
FTMO : Yes!
In normal trading outside FTMO lot sizing with account size is a good way to increase the equity exponentially. Pity that your rules preclude that. With fixed lot size you get a linear growth.
You can increase your lot size as you go, that is not the point of the video though - the point it to stay within your predetermined lot sizes that you have set when creating your strategy. If you are able to increase your capital, ( by passing another evaluation or with the Scaling plan or by leaving your profits on the account) increasing your lot sizes is not an issue.
Great Info!..... After all, risk management should be one's main focus when trading in these markets.
That's if you want to profit from it in the long run. Ftmo looks like a freat platform, still testing my strategy on the free trial, hoping to take the challenge soon💪👍
We will be looking forward to having you on board once you are ready!
is taking partials not working on trials? i tried
Scaling up the position size with the account is a good idea if it wasn't for the fixed $ daily loss limit. Is there any potential this will become a % amount in the future?
agreed
@@rudinski9163 It almost seems like this is a hidden banana skin they've created designed for people to fail, even those who are successful.
Let's say, that you have 100 000 USD account so you have 5 000 Max Daily Loss limit (fixed). Let's assume, that this rule was calculated from starting equity of each day - that would mean that if you had 110 000 USD, your Max Daily Loss would be pushed to 5500 USD. While this is some difference, we do not think it is something that should cause traders who read the rules to fail. Additionally, if this was calculated from the starting equity of each day, those who started with some loss would be disadvantaged - if the trader started with 95 000 that day, his/her Max Daily Loss would be just 4750.
With that in mind, it is also very technically demanding to take into consideration equity of each one of our traders to restart their Max Daily Loss limit accordingly.
@@FTMOcom Thanks, makes sense yes. Nobody should be getting close to that limit anyway.
On your previous video, you said that you are checking the trader's strategy and performances. Is there any chance that a trader will not be qualified for the funding program even if he passed both the challenge and verification?
We do not exactly see what is behind every trade, so we do not have exact idea on what strategy is the trader using, but we can evaluate whether the strategy is usable in the real market conditions or not. If the trader is not according to the real market conditions (abusing slippages, unrealistic high frequency trading: ftmo.com/en/trading-according-to-the-real-market/ ) we can not allow this trading style on FTMO Accounts as there would be no profits generated. Other than that, we do not care about what strategy do you use and you will have no problem moving to the FTMO Account.
Close partials. Not many traders know this but you can close a PORTION of your position, then put your stop loss to break even. Depends on your setup of course so only you can know when that would be beneficial 😉
@Luke Raamos Exactly. The gold rule of trading is to cut losses and let the profits run. By doing what Speedy said, you are basically cutting profits.
Hello !, the last point you made, are you in support of the Dynamic position size, over the Static position size ?, Should we downsize our position when in a loosing streak ?...
Ultimately, the you have to answer this question for yourself. This video should show you that in the long run it might actually work against you. Of course, results may vary.
@@FTMOcom okay thank you.
@@clementagbor7110 to answer your question. Keep your risk below 5% for all your total expected trades for the month. If you reach 5% within the month, you can half your position size until you break even. :)
@@theunknown9495 thanks a lot John.
I was told that if someone attempts the challenge and does not meet the profit target but is in some profit and has not violated daily or max loss then they get a free go again. Is this true and if so then what minimum amount of profit is expected?
Yes, that is true! If you meet all of the Trading Objectives with the exception of the Profit Target, yet you are still in some profit, you will get free repeat of the Challenge. You can read about it here: ftmo.com/en/faq/if-i-violate-the-rules-do-i-get-a-second-chance/
Hi,
I will be taking the challenge next week as I have recently hit the target profit on my trial account. I only have one question, where do I find about the pairs that I can’t trade on a specific day? And what happens if you forget to close a trade before the market closes on Friday? Thank you.
These restrictions do no apply to Challenge Accounts and Verification Accounts. In regards to Restricted Events, you can find them in the Economic Calendar available on our website. If you do not close your positions before the weekend, the FTMO Account will be terminated, and you will have to start all over again if you still want to apply for funding.
@@FTMOcom how do i know which pairs aren't allowed to trade in the economic calendar?
Sir I am just curious to know. How many different traders are currently having live accounts from FTMO. And what % of these qualified traders countinuesly maintain thair account.
Hello unfortunately this is not public information and also both of these numbers are constantly changing all the time since we are rapidly growing and gaining new FTMO Traders.
I heard that i can't keep positions open over the weekend on an FTMO account. Does this apply to the real funded account only or does it also apply to the challenge and verification accounts?
You can hold over weekend for challenge and verification. You can't on the funded account.
@@JL-im3go oh alright thanks i had to make sure 😂🙏🏽
Yes, you can not leave position open over the weekend on the FTMO Account. This does not apply for Challenge Accounts and Verification Accounts.
Hmm? I think scaling out of your winners by its very nature means you will scale out of your losers also e.g if a trade goes to 1:1 or 1:2 and you scale out but then price comes back and stops you out before hitting the 1:3 target you have essentially scaled out of a loser..?
This depends on at what price does the position close when losing. That is the question. If you do not adjust SL, you are not really scaling out.
Hi FTMO Team,
I have two questions:
1) Your points on Trade Management are made from the experience that your client's have made during the FTMO Challenge?
2) You basically state that is generally better to keep the trade to a healthy RR level over e.g. 2:1, 3:1, 4:1 with a lower WR then 50% without moving the SL to BE, changing the position size or Taking profits in the trade?
Looking forward to hear back from you.
Hello Tiago, we have taken into consideration experiences with our traders and our own experiences. We would agree, that it might be better to have WR of 15% and have RRR of 1:30 rather than have WR 80% and RRR 0.5 - while both would be profitable in the long run, the first one is way more so, than the other. Scaling out/moving SL etc. is still something that you might consider in some situations so it entirely depends on the strategy.
@@FTMOcom Thank you for the insight and information.
One Questions . when i pass the challenge then become ftmo trader and making profit at end of the month can i take another challenges for free charge or i have to pay the fee when iam taking another challenge ?
All traders have to pay per started Challenge Account, so even when you become FTMO Trader, you have to pay again if you want to apply for more funding.
SO, WHATS THE CORRECT WAY TO TRAIL SL, Let's say using Price Action?
The correct way has to be consistent. And for me a S/L is placed where I should be wrong based on my trade plan.
@@a1pwn Okay, do you keep the SL at closest point or at the second-last checkpoint? Because big favorable moves come with big retracements that could take you out if the chart was showing small retracements and you kept S/L according to that.
@@spseo9913 In bullish conditions I like to see previous bear candles be respected. I never place a S/L below a previous swing. If it is going against you it will reach for the liquidity below that swing. The middle or close of the last bear candle would then be the S/L placement, depending on how aggresive you want to play. The lower the S/L the fewer points you need for bigger risk to reward. Obviously it could get you stopped out allot if you are not focussed. I don't need big movements. I need favorable risk to reward setups. 30 points with 10 points S/L = 3-1
@@a1pwn Great! Thanks for the clarification. I haven't tested much on SL, only testing will tell what works for me the majority of the times.
We need webmoney, perfect money and neteller pls.
Is it possible to make videos about traders where are in FTMO more than 2 years?! I miss this sort of videos.
We will definitely add it to the list of our topic ideas, thank you!
@@FTMOcom thx.
Some really good tips here. Sound quality was terrible guys. It's like you recorded this in a cathedral.
Thank you for your feedback, we are currently working on our setup to improve audio quality.
Ok
@FTMO Why can I not trade Crypto?!!!! I have open Bitcoin trade it is now saying Market closed. I traded crypto every weekend for a month!!!
Hello Ben, it seems that everything is working. Please contact our customer support on the Live Chat available on our website or use support@ftmo.com
Dear FTMO, it’s 1:2 RR, not 2:1. First risk, then the reward follows. It’s not reward risk but risk reward.
Any one who doesn't break even when in profits R.i.p 🤣