The Market View – Analyst Gary Burton from FP Markets.
It is important to notice the Relative Strength Indicator remains below the key “50” level. Index weekly chart remains in a Primary DOWN Trend.
Closing above 5727 by the end of this week is required to show buyer support for the market.
Further closes below this level bring the long term trend line into play at 5600 points.
Position size and management guidelines
Building a trading system on simple rules requires a money management process.
As an example, should 1% of the account size be risked on an individual position, the position size can be calculated.
Here is the guideline, this allows the trader to build an R- (risk) based return.
The distance-to-stop is the $ amount risk. Dividing the distance to stop into 1% of the account size gives the position size.
The lower stop displayed will have a smaller position size. Profit taken on the trade can then be measured against the risk.
The distance-to-stop is 20 cents and the account size is 10,000. Using 1% ($100) of the account, divide the $100 by 20c. This gives a position size of 500 units.
The lower stop loss is 50 cents away. Using the same methodology of a 1% of account risk, the position size is 200 units.
Fund your account and they’ll add an extra 20% on top.
Open a new MT4/MT5 trading account and FP Markets will add an extra 20% on top of your first deposit.
Fund with $1000 and they’ll add $200. Fund with $2000 and they’ll add $400!