TradeLogger - free money management tool for traders

About EQ Curves

Other EQ Ideas

There are many other methods and strategies that traders can utilize equity curves for. Many of these can get rather complex and TradeLogger was designed to keep things easy for traders that are new to this type of thing.

On of the other strategies using equity curves doesn't involved toggling between live and simulation trading. Instead, some traders use their equity curve performance as a means to scale up or scale down the size of the trade they put on. For example, futures traders may put on an extra futures contract when their equity curve is above the moving average, or decrease the amount of their contracts if the reverse is true.

Some traders will base their position size relative to the size of their equity as a percentage, if it is above the moving average. This can go on and increasingly become more complex as you advance in your trading. However, to keep things simple, most traders really find the "live" and "sim" toggle quite satisfactory in their day-to-day trading. You can explore more ideas about this by Googling "equity curve trading".

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About Equity Curves

What is equity curve trading?
A simplified overview of the concept and how TradeLogger helps:

Equity curve trading is a money management method which can help improve the performance of your trading account by plotting your equity as a curve set against a simple or exponential moving average. You make your trading decisions based on the exact position of your equity curve, relative to the moving average.

There are at the very least two ways to incorporate this concept in your trading. One method is to simply stop trading with live money when the equity curve crosses above or below its moving average and then revert back when it crosses in the opposite direction.

If your trading system tends to “revert to the mean” (a win is usually followed by a loser or a loser is followed by a win), then you would stop trading live when the equity curve crosses above its moving average and vice versa.

There are many variations on this approach, for example, instead of completely stopping live trading, you can scale or adjust your position size when your equity curve drops below its average. If you are trading 3 futures contracts normally, you can then trade only 1 futures contract in this event, then revert back to 3 when your equity is above it's MA.

OK, so how can this really help me?

Good question. The answer is this: every good trading system will have inevitable periods of draw down when the market is not following through with profitable trades even though you may be executing your system flawlessly. OR, if you are making mistakes in your trading due to your own errors you can experience a period of draw down as well.

By logging each trade into TradeLogger as you trade, TradeLogger will give you feedback advising you about what your next trade needs to be based on your equity curve. By following the advice, you will avoid significant losses due to prolonged periods of losing trades. TradeLogger will advise you to stop trading live when it detects you are losing too much. It’s that simple.

Will you still have a few losers here and there? Sure, but wouldn’t you rather take 2 losers out of 10 rather than 10 losers out of 10?