Then, it is your time to look at our Sun Tze Money Management Automated Trading System.

MJFX 1M Fund: Past performance (1 Oct 06 - 30 Sep 09)

If you are interested in MJFX Millionaire Club Fund, please e-mail us for more information.

Feature:
(1) Pre-determined Acceptable Risk (10% Absolute Drawdown), Downside Protected
(2) Optimal Risk Vs Reward Ratio applied in Every Trade to Achieve Consistent Growth
(3) MJFX Sun Tze Money Management to Prevent Losing Streak Adverse Impact
(Eg: Comparatively Low Relative Drawdown even Losing 15 Trades Consecutively)
(4) Market Volatility adjusted Trade Lot Size to Ensure Shortest Drawdown Period
(5) Fully Auto-mated System Execution to Capture All Market Opportunities by 24 x 5.5

MJFX Kids College Fund: Past Performance (1 Oct 06 - 30 Sept 09)

Check out Kids College Fund Live Performance & Transactions History (Updated every 5 minutes):
http://mjfxdemo1.mt4stats.com/
If you are interested in MJFX Kids College Fund, please e-mail us for more information.

Account No.1 (US$10,000) trades:
i) Fibonacci Buyzone 11.3%-23.6% & Confirm Previous 4 Hour BULLISH Candle: LONG
Risk vs Reward Ratio: Target 1 = 1:1 / Target 2 = 1:2
[Move stop to breakeven point, once Target 1 is hit]

ii) Fibonacci Sellzone 81.4%-61.8% & Confirm Previous 4 Hour BEARISH Candle: SHORT
Risk vs Reward Ratio: Target 1 = 1:1 / Target 2 = 1:2
[Move stop to breakeven point, once Target 1 is hit]

Account No.2 (US$20,000) trades:
Note: Currency Pair Hit Stop Loss in Account 1, will be updated in A/c #2 Watchlist:
i) Fibonacci Buyzone 11.3%-23.6% & Confirm Previous 4 Hour BULLISH Candle: LONG
Risk vs Reward Ratio: Target 1 = 1:1 / Target 2 = 1:2
[Move stop to breakeven point, once Target 1 is hit]

ii) Fibonacci Sellzone 81.4%-61.8% & Confirm Previous 4 Hour BEARISH Candle: SHORT
Risk vs Reward Ratio: Target 1 = 1:1 / Target 2 = 1:2
[Move stop to breakeven point, once Target 1 is hit]

Account No.3 (US$30,000) trades:
Note: Currency Pair Hit Stop Loss in Account 2, will be updated in A/c #3 Watchlist:
i) Fibonacci Buyzone 11.3%-23.6% & Confirm Previous 4 Hour BULLISH Candle: LONG
Risk vs Reward Ratio: Target 1 = 1:1 / Target 2 = 1:2
[Move stop to breakeven point, once Target 1 is hit]

ii) Fibonacci Sellzone 81.4%-61.8% & Confirm Previous 4 Hour BEARISH Candle: SHORT
Risk vs Reward Ratio: Target 1 = 1:1 / Target 2 = 1:2
[Move stop to breakeven point, once Target 1 is hit]

FINAL RECAP on Fibonacci Sun Tze Money Management:
1) Split Frequent Trading (16%), Moderate Trading (33%) & Selective Trading accounts (51%);
2) Never risk more than 5% of Total Capital in any Single Trade / Day, Average In during Winning Streak like 1, 1.2, 1.4, 1.6 & Average Out during Losing Streak like 1, 0.8, 0.6, 0.4;
3) Apply Consistent (>70% win/loss ratio) Trading Method – Fibonacci Trading with Pre-determined Risk (Stop Loss) Reward (Target 1 & Target 2) Set-up.

Wish You Good Luck Trading!

Assume you have US$60,000 to invest in Forex Market. Apply Money Management technique, normally you will trade 2% ie US$1,200 per trade. But here, Sun Tze splits the fund into 3 accounts:

1) US$10,000 (Frequent Trading)
2) US$20,000 (Moderate Trading)
3) US$30,000 (Selective Trading)

Logic here is we do not believe Everyday is Sunday in trading, when we realise we were wrong and regret entering trade 1 in Account 1 and now see a clearer direction, we initiate trade 1 in Account 2. If you regret again for action taken in Account 2 and now see a clearest direction in your life, we start trade 1 in Account 3. To be exact how to execute trades, MJFX Forex created Fibonacci Sun Tze Money Management.

Why is it important? Well, we are in the business of making money, and in order to make money we have to learn how to manage it. Ironically, this is one of the most overlooked areas in trading. Many traders are just anxious to get right into trading with no regards to their total account size. They simply determine how much they can stomach to lose in a single trade and hit the “trade” button. There’s a term for this type of investing….it’s called GAMBLING!

When you trade without money management rules, you are in fact gambling. You are not looking at the long term return on your investment. Instead you are only looking for that “jackpot”. Money management rules will not only protect us, but they will make us very profitable in the long run. If you don’t believe me, and you think that “gambling” is the way to get rich, then consider this example:

People go to Las Vegas all the time to gamble their money in hopes to win a big jackpot, and in fact, many people do win. So how in the world, are casino’s still making money if many individuals are winning jackpots? The answer is that while even though people win jackpots, in the long run, casino’s are still profitable because they rake in more money from the people that don’t win. That is where the term “the house always wins” comes from.

The truth is that casinos are just very rich statisticians. They know that in the long run, they will be the ones making the money—not the gamblers. Even if Joe Schmoe wins $100,000 jackpot in a slot machine, the casinos know that there will be 100 more gamblers who WON’T win that jackpot and the money will go right back in their pockets.

This is a classic example of how statisticians make money over gamblers. Even though both lose money, the statistician, or casino in this case, knows how to control their losses. Essentially, this is how money management works.If you learn how to control your losses, you will have a chance at being profitable.

You want to be the rich statistician…NOT the gambler because in the long run, you want to “always be the winner.”

So how do you become this rich statistician instead of a loser?

So we know that money management will make us money in the long run, but now we’d like to show you the other side of things. What would happen if you didn’t use money management rules?

Consider this example:

Let’s say you have a $100,000 and you lose $50,000. What percentage of your account have you lost? The answer is 50%. Simple enough. Now, what percentage of that $50,000 do you have to make in order to get back to your original $100,000? It’s not 50%–you’d have to make back 100% of your $50,000 to get back to your original $100,000. This is called drawdown. For this example, we would’ve had a 50% drawdown.

The point of that little illustration is that it is very easy to lose money and a lot harder to make it back. We know you’re saying to yourself, “I’m not going to lose 50% of my account in one trade.” Well we would certainly hope not!

However, what if you lost 3, 4, or even 10 trades in a row? That couldn’t possibly happen to you, right? (Sarcasm used) You have a trading system that wins 70% of the time, so there is NO way you could lose 10 trades in a row. (Even more sarcasm used)

Well, while you may have a good system, consider this example:

In trading, we are always looking for an edge. That is the whole reason why traders develop systems. A trading system that is 70% profitable sounds like a very good edge to have. But just because your trading system is 70% profitable, does that mean for every 100 trades you make, you will win 7 out of every 10?

Losing Streak
Not necessarily! How do you know which 70 out of those 100 trades will be winners?

The answer is that you don’t. You could lose the first 30 trades in a row and win the remaining 70. That would still give you a 70% profitable system, but you have to ask yourself, “Would you still be in the game if you lost 30 trades in a row?”

This is why money management is so important. No matter what system you use, you will eventually have a losing streak. Even professional poker players who make their living through poker go through horrible losing streaks, and yet they still end up profitable.

The reason is that the good poker players practice money management because they know that they will not win every tournament they play. Instead, they only risk a small percentage of their total bankroll so that they can survive those losing streaks.

This is what you must do as a trader. Only risk a small percentage of your “trading bankroll” so that you can survive your losing streaks. Remember that if you practice strict money management rules, you will become the casino and in the long run, “you will always win.”

Let me illustrate what happens when you use proper money management and when you don’t…

Here is a little illustration that will show you the difference between risking a small percentage of your capital compared to risking a higher percentage.

You can see that there is a big difference between risking 2% of your account compared to risking 10% of your account on a single trade. If you happened to go through a losing streak and lost only 19 trades in a row, you would’ve went from starting with $20,000 to having only $3,002 left if you risked 10% on each trade. You would’ve lost over 85% of your account! If you risked only 2% you would’ve still had $13,903 which is only a 30% loss of your total account.

Of course, the last thing we want to do is lose 19 trades in a row, but even if you only lost 5 trades in a row, look at the difference between risking 2% and 10%. If you risked 2% you would still have $18,447. If you risked 10% you would only have $13,122. That’s less than what you would’ve had even if you lost all 19 trades and risked only 2% of your account!

The point of this illustration is that you want to setup your money management rules so that when you do have a drawdown period (losing streak) you will still have enough capital to stay in the game. Can you imagine if you lost 85% of your account? You would have to make 566% on what you are left with in order to get back to break even. Trust me, you do NOT want to be in that position. In fact, here is a chart that will illustrate what percentage you would have to make to breakeven if you were to lose a certain percentage of your account.

You can see that the more you lose, the harder it is to make it back to your original account size. This is all the more reason that you should do everything you can to protect your account.

So by now, I hope you have gotten it drilled in your head that you should only risk a small percentage of your account in each trade so that you can survive your losing streaks and also to avoid a large drawdown in your account. Remember, you want to be the casino…NOT the gambler!

Recap:
Be the casino, not the gambler! Remember, casinos are just very rich statisticians!

Drawdown is a reality and WILL happen to you at some point. The less you risk in a trade, the less your maximum drawdown will be.

The more you lose in your account, the harder it is to make it back to breakeven.

Trade only a small percentage of your account. The smaller the better. 3% or less is recommended.

It is desirable to trade when you have a high risk to reward ratio. The higher the ratio, the less you have to be right. But in practice, it’s hard to achieve, that’s why MJFX Forex created Sun Tze Money Management.

Second question is good Risk Reward Ratio or Win/Loss Ration more important? Winning percentages are important, but stand a distant second to risk/reward in terms of order of importance. Although traders would love to boast a high winning percentage, we would rather maintain a consistent and profitable track record. Assuming that we, as traders, will consistently beat the market (in other words, maintain a high win ratio) is a rather tricky mindset to have…especially when trading off a purely technical standpoint as is the case with these technical analysis recommendations. That’s not to say that there are not strategies/traders that have high win ratios, but they typically carry much greater losses in terms of percentages (i.e. risk vs. reward).

For a vast majority of traders—both newbie’s and veterans alike (e.g. the infamous turtle traders)—focusing on win ratios is a path that most oftentimes leads to a gut-wrenching downward spiral. A trader/strategy with an 80% win ratio may have a similar (or even worse) percentage return over time compared to a trader/strategy with just a 30% win ratio, for example. The reason behind this, generally speaking, is that winning a high percentage of trades is typically the result of a bunch of small wins with the occasional big loser. There’s nothing wrong with that as long as numbers work out and profitability is sustained over time. Unfortunately, this most oftentimes is not the case and just a few losing trades in a row within this type of model could easily wipe out an account, or at least make life a little more emotional (a.k.a. miserable) than it ever ought to be (which typically results in further losses since Money+Emotion=Disaster, thus the downward spiral).

Conversely, focusing on risk/reward allows for a more mechanical style of placing trades which significantly helps curb the emotional aspect of trading, which is paramount. This also allows for the age-old “cut losses quickly, and let profits run” mentality vs. the high win ratio mentality which tends to be more of a “take your profits quickly, and let your losses run.” mindset. The way we look at it…it’s way easier (and less suicidal) to take what the market gives you focusing on risk/reward and sustained profitability (where constant vigilance in terms of risk/money management is essential so that each trade no matter of how many pips of risk there may be always represents a percentage of total equity–usually between 2-5%) as opposed to trying to find the “holy grail” technical strategy, or that magic little pill which does little more than feed the ego.

We feel it is important to know your risk:reward ratio before entering a trade. How on earth can you determine your risk reward:ratio if you don’t plan your stop and profit target(s) before entering the trade? It can’t be done. To measure this ratio, simply divide the distance between the entry and the profit target by the distance between the entry and the stop. Everyone’s concept of a “good” risk:reward ratio varies, but we prefer to have a risk:reward ratio around 1:1.5.

The key here is BALANCE. Our research shows that Aug 08 – Jan 09 Trending Market, Good Risk/Reward Ratio Traders performed better while Feb 09 – July 09 Ranging Market, Good Win/Loss Ratio Traders have their upper hands. To balance these two animals, MJFX Forex uses Sun Tze Money Management (T/M) and we are always ONE STEP AHEAD.

Trading information includes Realtime Quotes, Live Charts, Latest Forex News, Upcoming Ecomomic Release and World Market Indices. Forex Funds Management service includes growth MJFX Kids College Fund and High Return MJFX Millionaire Club Fund. Don’t forget to check out Market Commentary by Kathy Lien.

New and experienced traders can earn as they subscribe MJFX Kids College Fund Management Service with an average of 6%-10% return per month and MJFX Millionaire Club Fund Management Service with an average of 12%-20% return per month.

Join MJFX Forex, FREE to learn forex market mechanics, pick up professional trading tips and get FREE 60 Days Trial of our Fund Management Services. This is all that a new or experienced forex trader needs to get back in control of the forex trading day.

Our Mid-Term Mission is to groom our first 100 Millionaire Investors with USD25K account set-up in 3 years.