in-depth view for forex tool #2
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This is one of two tools dedicated to creating and populating forex trading cycles, it is designed for traders who already have their money management rules and want to implement those rules without any help from the toolkit.

Just like the other tool "Step-by-Step", this tool will be used only once for each forex trading cycle, it collects the user's defined values and learn how calculations are to be done for the trading cycle, resulting in automating those calculations throughout the trading cycle's span.

This page will cover everything regarding this tool in details, covering the data flow, and the two steps process to create a new money management plan. All screenshots used will show just the part of the tool being explained, a native screenshot for the tool as a whole can be viewed/saved using the link above.


The below illustration details the type of data flow between this tool and other directly connected tools, to see the bigger picture for the whole toolkit's data flow please check this illustration.

Detailed data flow from/to "Custom Plan" forex money management tool

detailed data flow from/to "Custom Plan" forex money management tool

When used to create a new money management plan for a forex trading cycle, this tool will be the origin of all the rules used throughout that trading cycle.

The trading cycle's details and calculation rules for checkpoints are sent to "Checkpoints" tool, which then takes control of calculating and populating these rules and thresholds for each new checkpoint till the trading cycle is completed or closed.

Completed money management plans created by the tool can be loaded from "Trading Cycles" history tool, all the five steps will be automatically filled and configured as they were initially created so that an exact replica of that forex trading cycle can be launched.


In-depth explanation for the 2 steps process

There are 2 steps to go through for creating a new money management plan. 1: defining trading rules where all custom values will be collected, 2: review and activate where the calculated and logical results are displayed for reviewing, before finally activating the new forex trading cycle.

All the different toolkit's in-depth pages were created through the life span of a single forex trading cycle created using the other tool "Step-by-Step". Below we will recreate that plan in this tool to demonstrate it using the same money management situation.


"Custom Plan" forex money management tool in-depth: Trading balance

trading balance


The first part is to define how much to invest in a forex trading cycle, the balance entered here doesn't have to be the same as the balance in the brokerage account(s). Lets assume a trader have a total balance of 20,000 USD divided on two brokerage accounts, and that trader wants to try a new technical trading method using only 2,000 USD. In such case, 2,000 USD will be entered here as a trading balance and the actual balance with each broker will be entered in two brokers presets. That way, all the money management calculations will be done with respect to the 2,000 USD, while margin calculations and the ability to enter the market will be calculated with respect to the selected brokerage account preset.

Splitting the trading balance from the actual total balance gives options to try new forex trading techniques using a small amount of the actual balance, and keeps the user's focused on the trading cycle itself rather than on complex calculations.

Although we don't recommend such action, trading balance can be set to be more than the actual total balance of the brokerage account(s), for example in case of a bonus given by broker which is very common parctice by forex brokers. Again, we belive that to be a consistent trader, this kind of calculations shouldn't take place.

There are 3 inputs for this step. Dominant currency which can be chosen from a list of 30 currencies(can be custom defined in the tool's settings), the decimal points to use for that currency (Integer, 1, 2, or 3), and finally entering the trading balance to invest in this cycle.

"Custom Plan" forex money management tool in-depth: Checkpoints count & risk type

checkpoints count & risk type


In this part, the total count of checkpoints is entered and the risk type is set.

A forex trading cycle is a way for a trader to set a goal and evaluate his performance when that cycle is completed. During that trading cycle, there should be a way to self-evaluate while trading towards that cycle's goal, we introduced checkpoints for that sole purpose

That self-evaluation depends on the trading style, either after each trade which is most likely for medium to long-term traders, or time-based evaluation (for example, a trading session or week) which is used more by scalpers and short-term traders. Checkpoints were introduced to cover the needs of both trading styles, a checkpoint can be closed right after a trade or left opened to continue trading as much needed before closing that checkpoint. Both trading styles can be used within a single trading cycle, we used that approach for the trading cycle used to demonstrate the different tools of the kit.

Risk type can either be "fixed percentage" or "fixed cash", they both have their cons and pros and choosing either type is totally depends on trading style. Mathematically speaking, using "fixed percentage" will result in faster pace of winning or loosing when current trading balance is larger than the trading balance when the trading cycle began, and slower pace of winning or loosing when current trading balance is less than the trading balance when the trading cycle began, while using "fixed cash" will result in a fixed pace of winning or loosing at all times throughout the trading cycle.

"Custom Plan" forex money management tool in-depth: cycle's target & checkpoint thresholds

cycle's target & checkpoint thresholds


In this part, target for the forex trading cycle, and profit & loss thresholds for checkpoints will be set. Values entered here will be in percentage if the chosen risk type is "fixed percentage", or will be in cash if the chosen risk type is "fixed cash".

"Custom Plan" forex money management tool in-depth: Information panel

information panel


The information panel for step 1 will show alerts if errors were detected in entered values, otherwise it informs that all values are accepted and outputs are generated for reviewing.


"Custom Plan" forex money management tool in-depth: target, benchmark & R:R

target, benchmark & R:R


Target balance, shows the final target for this forex trading cycle with respect to dominant currency.

Per CP benchmark, shows the profit needed per checkpoint to create a profit curve from initial balance to target balance.

Per CP R:R, shows the reward:risk factor that will be used by default in all the trading tools, this factor depends on profit and loss thresholds specified earlier.

"Custom Plan" forex money management tool in-depth: Breakeven & strong edge

breakeven & strong edge


Breakeven, shows the win/loss factor needed to end the forex trading cycle in breakeven status, and the count of winning and loosing checkpoints as per that factor.

Strong edge, shows the win/loss factor needed to have a stron edge (2.000) over the market, and the count of winning and loosing checkpoints as per that factor.

Strong edge output, shows the trading cycle's profit in cash and percentage if the strong edge requirement is met.

"Custom Plan" forex money management tool in-depth: Maximum & minimum streaks

maximum & minimum streaks


Max win streak, shows the total profit if all the checkpoints were winners.

Max loss streak, shows the total loss if all the checkpoints were loosers.

"Custom Plan" forex money management tool in-depth: heads-up panel

heads-up panel


This panel will show as much logical notes about the plan as possible, it will show an alert if some extreme condition is detected. In our example, the panel is notifying that edge needed to reach target is higher than 2.000.

Those logical heads-up messages are based on formulas and calculations, they can never match a trader's own evaluation and risk tolerance. It is recommended to study the plan thoroughly before activating, since everything throughout the whole forex trading cycle is dependant on decisions made here.

"Custom Plan" forex money management tool in-depth: activate



The final step is to activate the money management plan and start a fresh forex trading cycle.