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How do I know how many contracts do I get when your signals come across?
Well, to being with, the act of managing your risk is such a feat that most traders fail within their first several trades and never recuperate. That is the bad news. The good news is, there is hope for those that trade our signals.
Risk Management is the act of only using a certain amount of your balance to make each trade on the system. The normal suggested amount per trade is usually set at 5 to 10% I like to see beginners use 10% nice round number that fits nicely into my calculations. 10% of $1000 Balance equals $100… easy math makes for ease of use…
But these are not the only numbers you need to know.
The amount you risk per trade also takes effect by how trades now can you fit into your amount you can risk…
So if you have $1000 balance and you are at 10% risk thats $100 we got that. But nadex.com has contracts that always have to equal $100 so if you get in on a buy contract and you get it for $75 dollars your risk is now $75 to make $25 AND then you can only trade 1 contract at a time…$75 goes into $100 only one time..GET IT? Good.
Now once you start to build up your balance you can easily begin to see more contracts being added because a week if trades winning can put $400 to $500 into your balance now your balance is at $1500 and 10% of that is $150 per trade. Meaning at the above averages of $75 per contract risk you can now put in 2 contracts.
So now you are trading two contracts for the week. We also recommend that you trade a set amount of contracts for the week only change each new week once yo have settled your balance.
Money Management How much do I keep in my account at nadex.com?
Well we know now that a certain amount in your balance allows you to trade more contracts now you need to find out the answer to the following question….How much do you need to make a month to live?
Once you answer that question simply DOUBLE IT… Now you have a figure…
For me I want to make $6,500 a month so x2 = $13,000
The average trading days is 22 per month…so $13,000 divide by 22 = $590 In order for me to make $590 divided by average per contract amount ($25) = 24 contracts daily.
So How much do I need in my account to cover those trades daily? Since we do about 8 signals a day that is 3 contracts per trade…3 x $75 = $225 per trade risk so thats a balance of only $2250 …Wow thats not alot…but you also have to figure in losses trading days we may only trade 5 trades and further more these results are all done with the intent to teach you about money management not guarantee results.
Finally , remember that making money through trading is difficult, exciting , frustrating, Awesome, and most of all the best feeling in the world when its all working. But when its not or there is a breakdown in your management…It can really SUCK…. So don’t suck Follow you rules of money management and risk management and we will provide the best signals we can inorder for you to obtain that success.