Along with managing the money making aspect of the strategy, TrendBot EA will also take care the money management. We will review all the details here so you have a good understanding of what position size TrendBot will use for the initial entry, and how it will increase it when profits are made.
As we discussed in the Risk Management Lesson, by following the rules you will limit the risk to a maximum of 30% for each opportunity traded. Our goal is to achieve 3-6% per month which compounds to 50-100% a year.
Starting Capital
When you attach the TrendBot EA to a chart, the properties window will appear. This is where you determine the starting capital that TrendBot will use for trading the opportunity. You can use all or part of the capital in your account. You can run TrendBot in multiple markets at once. However, by putting TrendBot to work in many markets, remember you have to manage the hedging in all of those markets together. All manual trades are not managed by TrendBot so multiple strategies can be run in the same trading account.
| Starting Lot Size | Capital/Lot | Starting Balance |
| .01 | $100 | $1,000-$9,999 |
| .10 | $1,000 | $10,000-$24,999 |
| .20 | | $25,000-$39,999 |
| .30 | | $40,000-$54,999 |
| .40 | | $55,000-$79,999 |
| .50 | | $80,000+ |
The minimum amount of capital that should be used to trade the TrendBot EA is $1,000. If the starting balance is less than $10,000, TrendBot will use an initial lot size of 0.01. If the starting balance is $10,000-$24,999, it will use an initial lot size of 0.10. As seen in the chart, TrendBot will increase the initial lot size as the starting balance thresholds are crossed. As we discussed earlier in the course, the initial buy or sell will remain the same for each trading cycle and will only increase with the Starting Balances in the chart.
TrendBot will use the starting lot size for every position entered until enough profits are made to increase the position size.
Position Sizing
The maximum position size is determined by the starting balance. If the starting balance is below $10,000, TrendBot will trade 0.01 lots for every $100 in the account. So if the starting balance is $1,000, TrendBot will enter a maximum of 10 lots of 0.01 each, and increase the position size for every $100 made. On accounts $10,000 or more, TrendBot will calculate the maximum position size for every $1,000 in the starting balance. So if the starting balance is $10,000, TrendBot will enter a maximum of 10 lots of 0.10 each, and increase the position size for every $1,000 made.
If the starting balance is $16,000, TrendBot will trade 0.10 lot per trade and use all 15 add levels. If you reduce the MAXRecoveryLevel (15) to 12, then TrendBot will only add on 12 levels instead of all 15.
Increasing Positions
The TrendBot EA increases the position size every $100 or $1,000 depending on the starting capital. TrendBot will increase the position size on the very next entry, and continue to trade that size if the position takes profit.
Trader’s Mindset:
Learn how to think in probabilities. There are many contradictions, conflicts and paradoxes in thinking that will cause you to assume that you already do think in probabilities, when you really don’t. You must trust your edge which gives your trades a higher probability of one outcome over another. Your confidence in your edge will result in you developing a winner’s mindset.