Pgdimes, I love this. Bottom line, I need to be a good forecaster, because I need to make a living. After that, I love using my methodology to predict the weather, and other things.
Once I've been on this site long enough, I'll tell you some more stories along those lines.
My money management is as strange as my methodology, which is another reason I have often said all this is personal. I've got one motto that is in granite, "The route is not as important as the final destination." Having said that, my position is all based on the time frame where the obviation is. My stops are based on that TF. One thing that is absolute about stops is they have to be at a methodological point. If you enter a long, and you don't want no more than 30 pips of risk, but that point is above a key support level, most likely the stop will get hit, and then people wonder why their stop got hit.
Stops are also depended on risk appetite. If the position with the proper stop exceeds the risk appetite, then don't take the trade. That is why I monitor 28 forex pairs for my actual trading pleasure. If one pair does not fit the bill, then I go on to the next.
I have no set criteria based on a % of risk. I also do not subscribe to risk/reward ratios. I might enter a trade with a 50-pip target, and a 150-pips loss. It might be 3 times the risk, but the probability of success, in that case, might be 95%. It's worth it.
I use very conservative lot sizes, which is another reason high does not bother me. Many of my trades, like today's CHF/JPY, are spot on, and I get immediate gains, and this can be verified in my Weekly Preview in my other thread. I also know that if I miss an entry, and it goes a leg against me, I know it will reverse at the more optimal level, and a lot of time I double up on my position. My stops are all depended on the position and the moment.
Another thing I have is a matching liquid account locally, to my equity in my trading account. I think this is very necessary to add to comfort level in trading.
In summary, and I'll repeat, the only thing absolute about stops is they need to be placed on the other side of a key S or R area. Another thing I adhere to is conservative lot sizes. Don't me to take my bows or blow my horn, but I'm an excellent trader, but I refuse to take it for granted. This is why I'm very conservative in my margining. If I place a trade, I know there are obviations on the weekly, it is not going to bother me if the trade happens to go against me 200 pips. It also will not bother me, if I add to while going against me. It is not too often when trades go against me more than a few pips, but I could make a common mistake, and say, "Trades hardly ever go against me, so I can afford to torque up me trade size." Huge mistake. When the one time it does go against me, I would have a huge problem.
I know I sounded vague in answering your question, but there are no absolutes in money management, but only what is absolute for the individual. I suggest to the many followers on my blog that this is one reason all traders need to begin on a demo before they go live. The trader will have a good idea of the risk, stops and every other element of trading that needs to be addressed on a demo. I've bankrupted many demos, but there is trillions of dollars in demo money. I don't have that much in real money.
BTW, the reason I love to forecast the markets I don't trade is because it further substantiates my methodology to me. I have to know and be reminded that mine is the best (For me. We all need to be convinced ours is the best.) This is why that even though my forecasts do many a lot of good, they do me a lot of good just in doing the forecasts and enunciating that knowledge.
PGDIMES;527510]Dear 4xpipcounter,
I have read many of your posts and found that you like to forecast events and take your trades on those beliefs. I would like to know much about your money management techniques, use of stop-loss and if you take positional trades, how do you manage overnight risk...[/QUOTE]
