Money management
Definition
Money management is managing trade size and capital: the amount of every trade is computed by rules chosen in advance, not "by feel." The standard is 1–2% of the current deposit per trade; risking more than 2% is no longer money management but gambling.
Three families of methods
All sizing methods answer one question — how much to put into the next trade — but in different ways:
| Family | Methods | Logic |
|---|---|---|
| Fixed | fixed amount, fixed percent | the size does not depend on the last trade's result |
| Progressions | martingale, ladder, Fibonacci, anti-martingale | the size changes in response to a win or a loss |
| Computed | Masaniello, Kelly criterion | the size is derived from the parameters of the whole series |
The further right in the table, the more discipline and math a method demands — and the more an application mistake costs.
The main principle
No method changes the payout or the share of winning trades — that is, not one parameter the long-run result depends on. Money management redistributes the result; it does not create it. The strategy is what earns; sizing methods solve a different problem — surviving until the strategy's edge shows up, and not giving back the gains in a bad stretch.
The practical consequence: pick a method after the strategy has shown a win rate above the break-even threshold, not instead of it.
In the terminal
In the BinoView Supercharts bot builder, sizing is a separate setting: a fixed amount, the Cascade recovery mode, or the Masaniello mode with a bank per series. The position size calculator computes the trade amount from the deposit and the chosen risk percent — a convenient starting point for manual trading.
How it differs from risk management
The borders are close but the jobs differ. Money management answers "how much to put in" — trade size and capital growth. Risk management answers "when to stop" — loss limits, pauses after streaks, protecting the deposit. The first without the second races the account toward its first catastrophe; the second without the first preserves a deposit that earns nothing.
Frequently asked questions
Which method should a beginner start with?
Fixed percent: 1–2% of the current deposit per trade. It needs nothing harder than one multiplication, brakes on its own in a drawdown and keeps emotions away from the trade size. Progressions and computed methods are worth trying only after fixed percent has produced statistics of at least a hundred trades.
Can money management make a losing strategy profitable?
No. Any sizing method only redistributes the result you already have over time: the drawdown passes softer or harder, the account grows faster or slower. The sign of the result is set by the strategy — a win rate above the break-even threshold. Without it, a progression merely changes the shape of the curve on the way down.
Why exactly 1–2% and not more?
Because of streaks. Ten straight losses at 2% per trade is a drawdown of about 18% — a workable situation. The same ten losses at 10% leave a third of the account, and getting back requires nearly tripling what is left. The 1–2% rule makes any realistic losing streak survivable.