I lost 3 of my $50k Prop Evaluation accounts until I realized this !!
This Ultimate Prop Firm Risk Management will help you scale through your evaluation Phase with ease
Ep3 - A+ Prop Risk Management
A Thread !!🪡🧵 like & Rt
This Ultimate Prop Firm Risk Management will help you scale through your evaluation Phase with ease
Ep3 - A+ Prop Risk Management
A Thread !!🪡🧵 like & Rt
PS. If you're not an already above average trader then tips in this Thread may not resonate to you
If you followed this Prop firm Thread series then you should be familiar with Prop firms, their rules & types and so on
This thread would be long but super informative!!
Trust me
If you followed this Prop firm Thread series then you should be familiar with Prop firms, their rules & types and so on
This thread would be long but super informative!!
Trust me
So watch n follow closely
One of the 2 prominent things that makes a lot of traders loose their Prop firm accounts is bad risk and bad psychology but for this thread we'd be focusing more on Risk Management
I'm sure you already know what Drawdowns are ? Before reading this
One of the 2 prominent things that makes a lot of traders loose their Prop firm accounts is bad risk and bad psychology but for this thread we'd be focusing more on Risk Management
I'm sure you already know what Drawdowns are ? Before reading this
A Drawdown is that said amount you're not allowed to loose completely on any of your account size. Now this Drawdown types differ with various firms and so does Drawdown amounts too are unique to various firms offerings
Let's get 2 things down first before we proceed
They are
Let's get 2 things down first before we proceed
They are
Strike/Win rate and Strategy
In as much as no particular strategy is preferred or the best to trade prop firms, traders must have a good win/strike rate backing their strategy
Now Technical Analysis and your strategy gives you an edge over the market
This is simply saying
In as much as no particular strategy is preferred or the best to trade prop firms, traders must have a good win/strike rate backing their strategy
Now Technical Analysis and your strategy gives you an edge over the market
This is simply saying
That over the Randomness and probabilities that exists in price movements In the market triggered by uncertain/unexpected events, your technical strategy or approach to the market gives you a number of strikes(failure rate) & a win(pass rate) in a number of trade outcomes
This is why it's important that traders journal their trades after each outcome has played out as this is one of major ways of determining your strike/win rate asides statistical data shown or presented to you by your broker but that aside
I'd be using a simple method for us.
I'd be using a simple method for us.
To be able to determine our strike/win rate we need to self access ourselves
You need to ask yourself a simple question, which is > how many wins or losses can you make/take over a defined number of trade outcomes.
To make it easier for calculation I'd be using 20 trades
You need to ask yourself a simple question, which is > how many wins or losses can you make/take over a defined number of trade outcomes.
To make it easier for calculation I'd be using 20 trades
So say to say, how wins can you make out of 20 trades if you were to execute them
Speak to your inner man sincerely
Anyways mine is actually 10
Which translates to about 50% win rate, to most persons they'd say it's poor lol but even a 30% win rate is good enough to scale
Speak to your inner man sincerely
Anyways mine is actually 10
Which translates to about 50% win rate, to most persons they'd say it's poor lol but even a 30% win rate is good enough to scale
Now we've gotten that out of the way. Let's move over to Drawdown
Let's say your trading a $100k account
With a 5% daily Drawdown and a 10% total Drawdown this means in a day you're not allowed to loose more than $5000 and in total you shouldn't loose $10,000 assuming you lost
Let's say your trading a $100k account
With a 5% daily Drawdown and a 10% total Drawdown this means in a day you're not allowed to loose more than $5000 and in total you shouldn't loose $10,000 assuming you lost
Below the daily Drawdown amount daily
For many of you asking how come the figures, its simple maths, 5% of $100,000 is $5,000 and so on
Unfortunately this Drawdown amount is the only amount fraction of the total acc we're given to trade but most persons don't see it that way.
For many of you asking how come the figures, its simple maths, 5% of $100,000 is $5,000 and so on
Unfortunately this Drawdown amount is the only amount fraction of the total acc we're given to trade but most persons don't see it that way.
So To build our Risk Management along side our strike rate, we take the DD and divide it by the trade Nō outcomes we're willing to take, $10,000/20 = Translates to $500
This automatically becomes our Risk
This means for every 20 trades RR we take we're risking $500 on each
This automatically becomes our Risk
This means for every 20 trades RR we take we're risking $500 on each
If you take a close look at our Daily DD you'd realise that we would be able to take 10 trade Fails before we get to Daily DD of -$5000
How I got 10 trades ??
$5,000/$500 = 10 Trades
Unfortunately chances of this happening are rather rare than low, speaking for the vast majority
How I got 10 trades ??
$5,000/$500 = 10 Trades
Unfortunately chances of this happening are rather rare than low, speaking for the vast majority
To many good traders their strike/win rate would look something like this in the pic below
Which means that it's very rare to loose 10 trades at a stretch out of 10 trades taken
But let's say this happens anyways
I'd have to limit myself to taking 9 trades only that day
Which means that it's very rare to loose 10 trades at a stretch out of 10 trades taken
But let's say this happens anyways
I'd have to limit myself to taking 9 trades only that day
Which leaves my losses up to -$4,500 total which is $500 shy of hitting the daily Drawdown.
(9 trade fails × $500 = -$4,500)
Some persons would also want to be able to take more than just 10 trades in order to let their probability outcome run, they can divide by a higher trade
(9 trade fails × $500 = -$4,500)
Some persons would also want to be able to take more than just 10 trades in order to let their probability outcome run, they can divide by a higher trade
Number, for example, 50 trades or 40 trades whatever works for them.
Combine this Risk plan with your preferred types of trade, trade plan and strategy and you'd be on a more sustainable side of things whilst trading your prop accounts
For myself I take 5RR+ trades which means
Combine this Risk plan with your preferred types of trade, trade plan and strategy and you'd be on a more sustainable side of things whilst trading your prop accounts
For myself I take 5RR+ trades which means
For every trade I win, I make $2,500+
(5 x $500 (Risk x Reward ratio) = $2,500)
The aim of Risk Management is to keep you in the game for longer and not to give you a strategic edge so if you ran down to open this thread in hopes for a miracle strategy, wake up there's NONE
(5 x $500 (Risk x Reward ratio) = $2,500)
The aim of Risk Management is to keep you in the game for longer and not to give you a strategic edge so if you ran down to open this thread in hopes for a miracle strategy, wake up there's NONE
This is how I use market to make my lot sizing & Risk calculations easier for myself
I believe if it made things easier for me, it should do same for you as well
Videos & pics below
I believe if it made things easier for me, it should do same for you as well
Videos & pics below
Tutorial video below, watch to understand better
I would have written more on the Psychology stuffs in Prop firm trading but I feel @Alh_Myke1 & @SDX_Trades delivered beautifully in their latest threads
Links tagged below ⬇️
@Alh_Myke1 thread below
Links tagged below ⬇️
@Alh_Myke1 thread below
@SDX_Trades Thread below on Psychology ⬇️
We've successfully come to an end of this Prop firm series. In case you missed any of the episodes, here are their links below to help you understand and flow better ⬇️
Ep1
Ep2
Ep1
Ep2
This thread took my lots of sitting & hours of writing even whilst my course mates attempted distracting me during the video processs😅😅😅
I'd really appreciate if you Liked & Retweeted this thread so others get to see it as well
And don't forget to follow me @Techriztm
I'd really appreciate if you Liked & Retweeted this thread so others get to see it as well
And don't forget to follow me @Techriztm
Here are some valuable persons in the space you can't afford not following, I personally have learnt lots from their tweets, you too will
@Alh_Myke1 @SDX_Trades @Starr_gael @Vee_forex @Kelvintalent_ @Kelvin_Graph @_Krypto_Khan @CryptoDefiLord @thissdax @chaxbtbg @JeremyofCrypto
@Alh_Myke1 @SDX_Trades @Starr_gael @Vee_forex @Kelvintalent_ @Kelvin_Graph @_Krypto_Khan @CryptoDefiLord @thissdax @chaxbtbg @JeremyofCrypto
Tell me in the comments. What and What are your concerns ?? And what did you learn from this thread series ??
PS. I'm sure lots of grammatical errors will preceed this thread cuz I was really rushing to meet up with time 😅😅 anyways of the most you'd definitely relate❤️❤️
PS. I'm sure lots of grammatical errors will preceed this thread cuz I was really rushing to meet up with time 😅😅 anyways of the most you'd definitely relate❤️❤️
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