Question about Money Management and initial Account size

HI Jordan,

I started studying your strategies finally and I have a question about Money management and the initial account size that can be used for trading with your strategies. Lets say we do order 1, step 1 of Anomaly: it says take 4% of your sub-account account.

So if my whole account is 1000$. I get: 22.5% of 1000$ = 225$.
Then I take 4% from 225$ and then I get 9$ to make a trade. With leverage 1:50 it becomes 450$ and if we divide it by 1 standard lot size 100 000$, we get that we can trade half of micro lot.

Here is the question: are my calculation correct? What is the account size you recommend to start trading from? Or may be increase leverage?

Thank you for all your hard work!

best wishes,
Sergey

Always limiting Risk and being Risk adverse

As a trader our soul goal is to always be limiting risk while seeking to achieve high returns. You cannot have the latter without first having the former. You must seek to limit your risk always in order to succeed at trading.

Let's look at the current investment banks who have failed because they were not focusing on limiting their risk but leveraging their risk. AIG (the largest insurance company in the world) and Lehman Brothers (was the 5th biggest investment bank in the US) both failed because they took on too much risk. I don't know about you but when I make mistakes and loss money the US government does not bail me out. I am the one responsible and I am the one who suffers the loss.

Your calculation is correct up to this point:
  order 1, step 1 of Anomaly: it says take 4% of your sub-account.

So if my whole account is 1000$. I get: 22.5% of 1000$ = 225$.

However a 4% trade size of a $225 account (your example) is 542 units. At 542 units 1 PIP = 0.05 USD (not $0.50) as in your example.

Even though the leverage is set to 1:50 the Margin used for this trade is about $20.00.  $500 account > trade size $20 > limiting risk = smart trading.

At half of micro lot that would be $200 margin used on a $500 is obviously way to aggressive. Many traders will trade a mirco lot or $1 a pip on a $500 account. That is just crazy!

Oanda is unique and takes some time getting used to. Play with the demo until you understand how it works. If you open a market order box you can see by typing in X amount of units how 1 Pip = Y$ in order to gain a better understanding of how it works.