Forex Trading - Fixed Fractional Money Management

[mypipbull]

Hi,

I am having problems getting the Money Management section to work correctly, here is my situation:

Currently trading a mini account with the following specs:

Contract size = $10,000
Margin = 0.5%
Current Equity = $50,000

I have a basic strategy but I cannot get the margin/lot size to work correctly.

I have found the following issues with the testing:

1) It does not allocate the correct Position Size based on my current equity (I'm sure it can do it but it just won't work for me)
2) Under 'Trades' in the Simulation Manager it tells me my in and out price but NOT my initial stop loss price....if I had this I could calculate my position size manually in Excel however, this software should be capable of this.

Other than this issue the Strategy Analysis is very good, exactly what I was hoping for.....I am just stumped on the simple issue of correct Fixed Fractional Position Sizing.

I wat to only risk 2% per trade but I can't get it to do it.

Thanks

Mike

[Tradecision Support Team]

Dear Mike,

>> It does not allocate the correct Position Size based on my current equity

When creating a strategy in Money Management, go to Position Size tab and select Fixed Sum, or % of Account and enter 2 as it is shown the screenshot below:



>> Under 'Trades' in the Simulation Manager it tells me my in and out price but NOT my initial stop loss price....if I had this I could calculate my position size manually in Excel however, this software should be capable of this.

Please let us know what do you mean when saying “initial stop loss price”.

Sincerely,

Tradecision Support Team

[mypipbull]

Hi,

Thanks for the reply.

I am aware that I need to check the box indicated and put 2% in the field, however it still does not seem to give me the correct results.

Additional comments below:


1) Under the Money Management Editor/Trailing Stops Tab: My Long Exit criteria is "When the low is lower than the Lowest Low last 5 days".  Based on this also being my initial stop loss on entry (I assume as I have nothing in the Stop-Loss Tab), this initial risk must be used by TD to calculate my position size, or number of lots based on my total risk of 2%? But that information is not presented in the Simulation Manager under the "Trades" tab?  Is this why it is not calculating my position size correctly?.....due to no information in the Stop-Loss Tab?

2) Under the Money Management "General" Tab, please tell me what I need to complete based on my mini account specs (margin, point value and contract size etc), another screenshot would be appreciated?!

I have a strategy that I am almost ready to deploy using the DTE function but I cannot do it until my Money Management is undercontrol, I have found a work around and manipulated the exported results from TD into Excel to give me 'real' dollar results......I am very happy with the features in TD but I just can't trade without the Money Management working.

Thanks for your help.

Mike

PS  If this is too confusing I am happy to speak to you on the phone about it.

[Tradecision Support Team]

Dear Mike,

Would you please describe the problem in detail: What position size do you think should be? Does always a position have the same size?

1. Position size does not depend on stop loss rules. Stop loss rules generate signal that close an open position.

2. In the Initial capital box, you can enter the amount of the starting capital that has been selected for testing the current system.
 
Select the Increase account to meet position size requirements check box, if you want to proceed with strategy simulation even if your initial account is not sufficient to enter a position with the required position size. Clear this check box to automatically decrease the position size according to the amount of money left in the account.
 
In the Minimum lot size box, you can enter the minimum number of contracts/shares that must comprise the transaction.
 
If you buy or sell on leverage, and you want the system to be tested taking into consideration the margin requirements, you need to specify the Margin parameter.
 
It is specified in USD per unit (contract) or as percentage per unit (the same as % per transaction). When trading on margin, you must make a good faith deposit called a margin, as well as have enough funds in your account to pay off all equity drawdowns. The Margin is the dollar amount that you pay as margin for each contract. The Margin can also be specified as a percentage of the account amount that you need to deposit to purchase securities on credit.
 
Select the Separate stop and profit target rules for longs and chorts check box to define separate stop-loss, trailing stop and profit target rules for longs and shorts.

Sincerely,

Tradecision Support Team