Indicator for Risk Management

I designed an indicator for the visual display of the risk management options that all of my Entry Apps have built-in.

 

This may be useful for traders to quickly grasp the position size for a new trade to be entered on the chart instrument of MarketScope.

 

It allows to select four different modes on how to calculate the position as a percentage of the

1. Account Balance
2. Account Equity
3. Account Margin
4. Discounted Account Balance

 

The Discounted Balance uses the Account Balance minus the maximum possible loss of all open positions of the account, whose StopLoss is set to a possible loss. Positions, whose stop level is at break-even or beyond at a profit level, are not accounted for.

 

The indicator also plots the envisaged Stop Level onto the chart, which I find quite useful.

 

There is one constraint for the use of this indicator:

 

If you are looking to open a long position, the indicator needs to be applied to an ASK price series of the chart instrument.

If you are looking to open a short position, the indicator needs to be applied to an BID price series of the chart instrument.

 

Happy Trading!

 

 

 

 

I posted the indicator for download at:

http://forexforums.dailyfx.com/indicator-sdk-support/613943-risk-position-manager-indicator.html

http://www.fxcodebase.com/code/viewtopic.php?f=39&t=40698

New Risk Management Option is now available - Try it out!

The former Entry Apps have had risk management options to calculate the position size as a percentage of the available account equity, balance, or margin, thus giving the user three options.

A new risk management option has been added as a fourth option, which is to use a percentage of what I call a "Discounted Balance".
The discounted balance is simply the account balance minus the maximum possible loss of all open positions of any instrument of the account, depending on their current StopLoss price level.

It is worth-wile noting that an open position, whose StopLoss level has already reached break-even or any further profit level, does not contribute to the reduction of the position size. Only open positions, whose StopLoss level will yield a possible loss, contribute to the reduction of the size of the Position to be opened.

Hence, this is a more conservative risk management for traders who work with a larger number of open positions at the same time and provides for the most realistic risk scenario, since all possible losses are acccounted for when calculating the available money to trade with.
Examples can be downloaded from http://forexforums.dailyfx.com/signal-strategy-fxcm-marketscope/606777-multiple-take-profit-position-management-fully-automated.html#post1637430 or from http://www.fxcodebase.com/code/viewtopic.php?f=39&t=34297&sid=ca17c8bf9653224bfb76b7588ae4ac39.

Happy Trading!