Stay alive….to gain money

One Formula :THE STRATEGIC HOPE (SH)

STEP 1 – FIND YOUR ML (Max Loose)

• What is-it ?

– If your capital is 1’000 $

• If you are playing with 10k lot, your ML is 1’000 pips

• If you are playing with 1k lot, your ML is (1’000 / 0.1 ) = 10’000 pips

STEP 2 – SEE HOW IS THEPOTENTIAL LOOSE OF THE

STRATEGY : PL

Take the largest losing trade

Take the MP

Take the MaxDD

THE PL FORMULA

Exercice…

• We have 1000 $ and we use micro lot of 2k

• It means that our ML are :

– ML = 10 x Kapital/Lots = 10 x 1000 / 2 = 5’000

OUR ML IS 5’000

We choose ONE strategy OnTheRiverWL with AUDUSD

MP=4

MaxDD =-479.20

Larget loosing trade = -300.10

We compute the PL

PL1= MP x Largest Loosing Trade x Lots / 10PL2 = MaxDD x Lots / 10

PL1 = 4 x (-300) x 2 / 10 =-2400 / 10 = -240 PL2 = - 479.2 x 2 / 10 =- 958 / 10 = -95.8

PL1 < PL2 then..

Our PL is -240

STEP 3 : ADD THE PL & THE ML.

BUILDING THE STRATEGIC HOPE (SH)

STRATEGIC HOPE (SH)

=ML + PL = 5000 + (-240) = 4760

DECISION

• IF SH (STRATEGIC HOPE) < 0 it means that the strategy have a good probability to blow your account : DON’T TAKE IT EVEN IF STATS ARE GOOD….RUN AWAY

• IF SH > 0 , IT MEANS THAT YOU CAN TAKE THE STRATEGY

With more than ONE STRATEGY SELECTED

• IF you have more than one strategy the ML stay the same BUT your need to compute the different PL or each strategy and add them.

• If you select 2 strategies :

– Strategy A have -100 in PL and Strategy B have –200 in PL it means that the PL you enter in the formula is -100 + (-200) = -300

TEST YOUR SKILLOPEN A DEMO ACCOUNT