Risk Management Protocol for Futures Prop Firms - द्विभाषीय उपशीर्षक
Hello everyone, welcome back to the channel.
So this video is on a highly requested topic, risk management for future is prop firm accounts.
So if you're here,
you probably already know what a prop firm or a funding company is,
but if not,
I'll probably be doing, um, a series on them in the future so stay tuned or you can check out my intro to future's webinar.
I talk about it a little bit more there but essentially they are,
they are companies that offer you leverage and not risking your portfolio and in exchange.
You got to pass their challenge and there are more rules to follow but moving on on, what is risk management anyway, right?
The definition is using protocols to monitor and minimize the potential damage to your trading account while also maximizing the potential opportunities.
So, position sizing is the amount of money you want to risk for that Divided by the contract value per point, which is also divided by the points of risk, which is your stop loss, right?
And again, if you want this for the detail, I do have a free intuitive futures webinar, but just an example here.
If you're risking $800 and a 20 point stop loss in NQ,
The formula for that is $800 divided by 20 divided by 20 because on NQ 1 point is equal to $20.
Okay, so that means on that trade you should take two contracts of NQ.
But there is an easier way to figure this out and I'm going to go over that just now or or 20 contracts of the micronas stack,
right?
So don't forget about that.
I'm not gonna move on.
So here's an easier way to calculate this.
If you You can use the longer short tool and create a template and pretty much put your account size in there
and how much you want to risk and it will let you know exactly how many contracts to take, right?
So here I will pretty much put the drawdown maximum drawdown on that challenge
Lot size you just put one and let's say I want to risk 10%
of that maximum drawdown for a trade It will literally tell me the quantity here, right?
How contracts I should take so here I should just take one and Q or since it's 1.1,
I can take 11 micro NASDAQ contracts.
And just further illustrate that, to you a better idea, I will show that on my trading view right here.
So this is an example of a trade I took, a fair value gap in discount, stop was here.
So essentially double-click this, and you can.
size, and whatever you want to risk here, 10%, 5% of that maximum drawdown, more if you want, whatever, and then you click save as template, and you can see I have different templates saved here.
And press OK, just put the lot sizes one.
And right here, if I want to put my stop at this swing low calculates this, that's a stop of 90 points.
So based on that, it's already telling me what my position size should be.
So actually, no math involved in that pretty cool tool.
Okay, moving on, there are three different tiers of risk I do.
The lowest tier, the first one is 5% of the maximum drawdown for that challenge account.
The middle tier or the default tier, which is what I use most of the time is just 10% of the maximum drawdown.
This means I would need 10.
or more because I will get to that in a minute to lose the account, right?
And lastly, the highest tier of risk, which is 20%, or one-fifth of the maximum drawdown.
So an example there is on a 150k challenge.
Most of the the maximum drawdown is 4500, so the default risk tier here is $450 per trade.
So let's go over each tier of risk and the conditions in which I use them in.
So first tier,
lowest tier,
I use them in low probability conditions or as we also call them high resistance liquidity run conditions or I'm on a losing streak.
So if I have two losses in a row,
So going to go down to my lowest tier of risk until I make back half of my drawdown.
Then I can go back to the standard tier.
So let's go over what do I mean by low probability conditions?
Well, there's a checklist I go over.
Pretty much you will see me going the over this on stream,
sometimes out loud, sometimes just in my head, but something I consider every single day in the morning.
It's a low probability condition if London session expanded towards the drawn liquidity.
Or, if the London session took out both the Asia session high and the low.
Or, the drawn liquidity has been met before equities open.
So this means if ES or NQ has already hit a dealies,
point of interest or a weekly point of interest that I was already looking at before even 930 starts,
then that means low probability conditions because we just had an expansion or a So it's likely we're going to go into consolidation conditions,
which are more difficult to trade in.
Or another condition is DXY, if it's not inversely correlated to the indices, right?
So typically we want DXY to be moving up while NQ or ES are moving down.
Or the opposite.
We want DXY expanding lower towards south side of E.S.
and NQ are expanding towards the bi-side liquidity.
Lastly, if the indices are all out of sync, which means typically if YM or the DAO is making new
highs on the day while NQ,
the NASDAQ, is making new lows on the day, that means the indices are all out of sync and it's low probability conditions.
Okay, standard tier of risk.
I use this pretty much as the default.
If it's not low probability conditions, I'm pretty much using this as my risk default.
We're not in high resistance liquidity conditions and a set-up presents itself according to my model, right?
Lastly, the highest tier risk, which is rare.
Don't do this often.
But if it's an A plus setup,
according to the trade criteria and on a red folder news day, high impact folder news, then I will probably take higher risk on that.
Or if it's not an expansion day, right?
And the draw on the query has still not been reached, and I already booked the win on the day.
Then I will likely take a higher risk.
So then I'm pretty much risking.
profits I made on the day,
which means that the trade would pretty much losing the trade would only bring me back to break even on the day and not that negative.
So what's important about this is that my account must not be in any kind of drawdown during this type of scenario or else.
It doesn't give you much room, right, to get back.
where you were.
Lastly, if this trade ends up as the loss, you stop trading for the day because it is just way too easy to let one high risk trade idea snowball into a
blown account.
And for most beginners, I actually don't really recommend and this highest tier of risk because it does require more energy and mental fortitude.
So trade management.
Always fully accept the risk before entering a trade.
What does this mean?
You have to be thinking about, okay, if I lose out on this trade, I'm totally okay with it.
And I'm going to move on.
It's just the cost of doing business.
You have to do this to be in the proper mindset to prevent getting back in and revenge trading.
So it means if it's a loss, just the cost of doing business.
We move on.
How I typically manage my trades if you watch my stream probably know about this
But if it closes above an intermediate term high or low in my
favor I'll move my stop to the last swing that broke that higher low
So this will typically trim the risk by about 25 to 50%
Also price is about 80%
of the way to the target I will take a partial and I'll move the stop to break even as well as when the trade gets to 2r
I'll take most of the position off and move the stop to break even now.
This is important This is the number one thing to avoid in trading.
It is over trading Okay, this is the biggest killer of accounts.
You can easily get into tilt when you get stopped out in a trade and keep trying again,
or maybe you reverse yourself, you reverse yourself again, and then you just get confused, right?
You can easily get blinded by price action.
So, you'll start to see things that are not.
and try to trade ideas that you typically won't take.
How do we prevent over-trading?
Well, one thing I do is I have an external disruption.
I have an alarm on my phone at 10.15 a.m.,
pretty much in the middle of the trading day for New York AM session for a mental game reminder.
And I have an alarm at noon,
basically, to tell myself, in case I am still in a trade at that point, it's time to wrap it up.
So this serves as an external disruption,
so I don't have to do it myself,
essentially, and I can have a reminder, hey, bring myself out of that mindset if I'm feeling overconfident,
if I'm feeling fearful or fomo, any kind of thing.
It serves as a wake-up call, so to speak.
Another thing I do personally, I have a software that locks me out of my trading platforms.
If I click it, it closes my trading view and my Ninja trader for the day.
But be careful with this because you don't want to be in a trade when that happens.
So I pretty much manually will open up the software.
and lock myself out of my platforms and software is called cold turkey if
some people are interested I know some have asked me about that next the number one
thing you need to do is if you're tilted or over trading you need to physically
step away from the screens you need to remove your yourself, right?
So either go outside,
go for a walk,
go to the gym,
or you just go to another room and piece back and forth,
because it's the last thing what you want to do is still be on the charts.
I do a journal, I brain dump, so anything that I'm feeling or what happened, just write it out with no sort of structure later.
When you're out of better frame of mind,
you review what happened so that you can map out a pattern and avoid it in the future.
So you have to journal or review what happened or else you run the risk of
holding residual emotion and repeating the same things in the next session.
So that's how you avoid the number one reason people blow up accounts and I hope that this PowerPoint has brought some clarity,
hit that like button and subscribe if you found this helpful and I hope to see you
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