Money Management and Trading Strategy

In trading, different traders have their own different trading style, but as long as it works for them, then that are good strategies.

Some emphasize more on Money Management while some on Trading Strategy but both need to be part of the trading.

Those who emphasize more on Money Management usually have a ok strategy but with the Strong Money Management, a 40% success rate with 1:1 risk reward ratio can help them to make profit from the market in long run.

Those who have Good Strategy with more than 50% success rate and at least a 1:1 risk rewards ratio, or at least 50% success rate with more than 1:1 risk rewards ratio, they just need to have a constant fixed position size will help them to make profit from the market in long run as well.

How about a Good Strategy combined with a Strong Money Management?

That could be an ideal case. But to me, if you have a good trading strategy, you are always in an upper hand. It is easier to master Money Management than a Strategy.

Those who trade mainly base on Money Management usually need a bigger capital. Here is one "Sure Win" trading if you have a strategy with 1:1 risk rewards ratio and low success rate, but a large capital. It's all about Statistics, just like how casinos or brokers make their money.

Example: base on 20pips stop loss and take profit (This is base on making profit with just one winning trade, you can also come out with formula which enable you to make profit with two continuous winning trades, this will bring down the incremental of the lot size)

Trade...Lot size...Win/Loss...P&L/trade...Overall P&L
1............0.1.........Loss........-USD20.......-USD20
2............0.2.........Loss........-USD40.......-USD60
3............0.4.........Loss........-USD80........-USD140
4............0.8.........Loss........-USD160......-USD300
5............1.6.........Loss........-USD320......-USD620
6............3.2.........Loss........-USD640......-USD1260
7............6.4.........Loss........-USD1280....-USD2540 8...........12.8.........Win........+USD2560...+USD20

But Personally, I prefer to trade using a Good Strategy with high success and at least a 1:1 risk rewards ratio or a high risk rewards ratio with at least 50% success rate.

As for Money Management, I'm using a constant lot size base on the capital available. Here are the example of my position sizing base on capital available:

Capital.........Lot size (Max.)
USD2k...........0.2
USD5k...........0.5
USD10k..........1
USD20k..........2

Note: This is provide you've mastered a good trading strategy.