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Originally Posted by waltini
Hi Bill,
Would you mind going through the figures for me? I have been trying to think through the checkgrid and I was wondering how I would go about money management. I guessed the Grid steps and TP would remain the same but the lots would increase but it would be best to wait until the price was near the middle of the grid.
But if your equity goes up 10% and you started with 0.01 lots you can really only go 100% increase with lots (0.02)?
thanks
ian
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Simple... Using nice round numbers and ignoring losses/gains from the hedge program. And assuming $5000 account and order size of .01 and 1% daily gain, in 100 days another $5000 has been added, so bump the order size to .02. Twice the order size so another $5000 is added in 50 days. Bump the order size to .03 and then wait 25 days, etc.
Keep in mind that everything will scale up, including equity, balance and drawdown. Someone is going to say, "Wait, you could have a drawdown of $30,000!!!!!" Yep, you could. But if you only put in $5,000 and close out a $50,000 account netting $20,000 you still have $15,000 cash ahead.
If you are unsure - run the demo for a year and test it for yourself!
Take care,
Bill