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The formula starts with the pips calculation. What is pips calculation? Most of the traders focus on the profit and loss in terms of dollars in the account which is good but in addition to that you should also keep a track of the pips gained or lost. Try to gain 200-300 pips a month. A gain 1000 pips is your one step. If you win 1000 pips, you go one step up. A simple calculation is that 1000 pips of gain trading 10K lot or 0.1 lot in a $1000 account will double that account.

The money management system has two parts:
1. Rate of increase
2. Rate of decrease

RATE OF INCREASE

An average of 250 pips gain a month will double the account 3 times (300% gain) in a year.

The stepping formula is as follows. First thing to remember is that we are targeting and average of 200-300 pips a month or 10-12 pips a day. That is all you have to gain in order to make money in the markets.Step 1
3-4 months target
$1,000 account
Trade size 6,000-10,000 (maximum 1 mini lot)
Keep track of pips
1000 pips gain = account doubled to $2,000
go to step 2

Step 2
$2,000 account
Trade size 12,000-20,000 (maximum 2 mini lot)
1000 pips gain = account doubled to $4,000
go to step 3

Step 3
4,000 account
Trade size 30,000-40,000 (maximum 4 mini lot)
1000 pips gain = account doubled to 8,000
go to step 4

Step 4
Trade size 60,000- 8,0000 (maximum 8 mini lot)
1000 pips gain = account doubled to 16,000
go to step 5

Now this is important
Step 5
Trade size 100K lot
1000 pips gain = account doubled to 32,000
Next Step

This should take approximately 2-3 years. Just by modifying the trade sizes, we can multiply our gains 5-10 times. Note that you do not trade more than 100K single lot for a $16,000 account due to risk control. To trade two lots, you need to take the account to $32,000 and four lots for a $64,000. This is to control draw downs and risk.

RATE OF DECREASE

This is why the system is anti martingale. Here, you will decrease the trade size to one step if the account goes under the step amount ladder.

To understand this, we will use an example.

To trade 100K lot, you need $16,000. If your account goes under $16,000 ($15,999) you go back to step 4 and trade maximum 0.8 lot. As soon as the account goes above $16,000 you will jump back to step 5 and trade a 100K lot.

Notice that the rate of decrease has a greater risk control. The beauty is that you are saving the gains with this system.

It is a good money management system due to better potential of growth and better risk control.

Use it with your daily forecasts.

Remember again, the two main steps of trading are lot size calculation and stop placement. If you do not practice money management, one bad trade can wipe you off.

TARGETING PROFITS IN PIPS

Start calculating the pips gained and target 1000 pips every 4-6 months. This will double you account twice to three times in a year.

MONEY MANAGEMENT TRADING TIPS

1. Save your account capital. This should be your first motive. Making money comes next.
2. Never let the winning trade turn into a losing. Use trailing stops once the trade goes in favor. The worst scenario should be to close the trade at no win and no loss.

3. One trade with wrong money management can ruin your account. Always control trade size.
4. Focus on playing by pips rather than dollar gain and loss. By practicing simple rules of lot size control, stops and targeting an average of 200-300 pips a month will take you far ahead of the game.
5. Trading is a game of probabilities and not certainties. Increase your chances of winning by practicing good money management.

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