I don't give advice as which money management to use. As each person is very different. Some are starting at $200 some are at $20,000. Some people have full time aspirations others are looking for just a couple bucks extra month. So I don't give specific advice to you on which money management to follow.
The point of this page though is to give you some ideas of some results and tailor your money management to your own comfort level.
I am only going to mention 2 options here. Obviously their is a LOT of other money management ideas you can use and even change the ones I mention to your own comfort level. The point is just to give you some ideas on trading the Friday Trading System and other systems for that matter.
Option #1
This is an easy option to explain and implement. All the stats for this option is going to be based on the results for the FTS from 2012-August 23rd 2013. (using the Filtered results)
From Jan 2012-August 23rd 2013 the FTS had 37 Wins and 11 losses.
Let's assume you started back in Jan 2012 and traded EVERY trade for the same amount.
Let's assume you trade $55 per trade on EVERY TRADE. (Based on $55 to win $100 like at nadex)
On a winning trade you are going to make a profit of $45. For every loss you would lose your $55.
37 wins x $45 profit = $1665 in Profits
11 losses x $55 losses = $605 in losses
So $1665 - $605 = $1060 in total profits!
Now you could have started back in Jan 2012 with an account of $500 and on August 23rd 2013 your account would be at $1560. ($500 account + $1060 in PROFIT) or a 212% Return in 20 months!
Of course you could have scaled that say you started with $220 per trade the results would be 4x the above amount etc.. So you can do that math yourself.
Bottomline this option is steady and with the results we had this past 20 months you would have had a nice return.
Option # 2
The FTS can get some great win streaks. So one option is to try and capitalize on the nice winning streaks.
The idea of option #2 is basically starting with 1 contract and if the trade wins you reinvest the profits into the next trade. So for example if you won trade #1 you would now trade 2 contracts on trade #2.
Below I break down what that might look like for the trades. With this option you are only reinvesting PROFITS!
YOU NEVER EVER EVER EVER DOUBLE UP OR INVEST MORE AFTER A LOSS! THIS IS NOT A MARTINGALE SYSTEM WHERE YOU ARE RISKING MORE AFTER A LOSS EXPECTING THAT THE WIN WILL COME AT SOME POINT!
The key to this option is to determine how many wins in a row you are willing to go for. And once you have that # you need to stick with it. Our longest winning streak was 14 in a row but do you really want to risk that many trades in a row?
Let me run a quick example for you. I will give you 2 sceranios.....
Lets assume you are starting with 1 contract trades. And assume you are looking for 3 winners in a row. So that means to start trade #1 you are buy 1 contract. And if you lose at any point in Trade #1-3 the next trade will be 1 contract. And if you win Trade #3 that means trade #4 will go BACK to 1 contract.
So here we go....
Trade #1 you buy 1 contract. You Win
Trade #2 you buy 2 contracts. You win
Trade #3 you buy 4 contracts. You LOSE.
Trade #4 you buy 1 contract
OK now lets say you win the first 3 trades....
Trade #1 you buy 1 contract. You Win
Trade #2 you buy 2 contracts. You win
Trade #3 you buy 4 contracts. You Win.
Trade #4 you buy 1 contract
Ok now you can decide how many wins in a row you are willing to risk.
The idea behind this is getting some nice winning streaks which really mean a lot to your account.
Keeping in mind this is what the stats were from Jan 2012-August 23 2013.
Some stats from Jan 2012-August 23rd 2013
1 streak of 3 wins in a row
2 streaks of 4 wins in a row
2 streaks of 5 wins in a row
1 streak of 14 wins in a row
* All streaks are based on wins. For example we had a win streak of 14 in a row. That would actually mean during that streak we had 3 winning streaks of 4. (Which is NOT included in the stats)
Trade # 1
1 contract
Trade # 2
2 contracts
Trade # 3
4 contracts
Trade #4
8 contracts
Trade # 5
16 contracts
Trade # 6
32 contracts
Trade # 7
64 contracts
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Now let's say you started with that same $500 account back in Jan 2012.
You would still have 11 losses which means you would lose 11 x $55 = $605 in losses.
But lets say you went for 3 wins in a row. Which means you were winning $315 PROFIT after 3 winning trades.
So 9 times from Jan 2012-August 23rd 2013 we had 3 wins in a row. And if you stopped after each 3rd win in a row you would get $315 Profit.
So 9 x $315 = $2835 in PROFITS
11 losses x $55 = $605 in losses
TOTAL PROFIT $2,230 So my account would stand at $2230 profit + $500 starting capital = $2730 a return of 446% for the last 20 months!
You can do the #'s yourself based on the above stats. But just one more I will give you. Let's say you were going to try for 5 wins in a row.
We have had 5 wins in a row 4 different times from Jan 2012-August 23 2013. (Remember during that streak of 14 wins we had a 5 wins in a row TWICE!)
Each time you cash out on the 5th win in a row you cash out with $1395 PROFIT!
So 4 x $1395 profit = $5580 in Profit
Still the same 11 losses x $55 = $605 in losses.
TOTAL PROFIT of $4975 so my account would stand at $5475! A Return of 995% for the 20 Months!
Keep in mind when using this option that as you are looking for larger streaks you are going to be cashing out LESS TIMES. The $$ will be big when you cash out but it will be less times. For example 9 cash outs of 3 wins in a row vs 4 cash outs of 5 wins in a row. It also means your bankroll needs to handle taking losses. It maybe months for you to cash out when looking for bigger streaks so make sure you have a big enough bankroll to handle the losses.
Also ask yourself how big of a streak your personality can handle? Are you really going to pull the trigger on trade # 5 in a row? Will you follow thru? Is it going to be too stressful for you? I can't answer those questions for you.
I hope this information is helpful to you and you can profit from it.
Steve
P.S TELL YOUR FRIENDS to join us at http://www.MrBinaryoptions.com Disclosure..... No guarantee the information on this page is
accurate. I did my best to make sure the results were correct but I can not
guarantee the information is accurate. You take your OWN risk with your
trading.