Risk Management Tool [LuxAlgo]

Good money management is one of the fundamental pillars of successful trading. With this indicator, we propose a simple way to manage trading positions. This tool shows Profit & Loss (P&L), suggests position size given a certain risk, sets stop losses and take profit levels using fixed price value/percentage/ATR/Range, and can also determine entries from crosses with technical indicators which is particularly handy if you don't want to set an entry manually.

1. Settings

Position Type: Determines if the position should be a "Long" or "Short".
Account Size: Determines the total capital of the trading account.
Risk: The maximum risk amount for a trade. Can be set as a percentage of the account size or as a fixed amount.
Entry Price: Determines the entry price of the position.
Entry From Cross: When enabled, allows to set the entry price where a cross with an external source was produced.

1.1 Stop Loss/Take Profit

Take Profit: Determines the take profit level, which can be determined by a value or percentage.
Stop Loss: Determines the stop loss level, which can be determined by a value or percentage.

2. Usage

One of the main usages of position management tools is to determine the position size to allocate given a specific risk amount and stop-loss. 2% of your capital is often recommended as a risk amount.

Our tool allows setting stop losses and take profits with different methods.

The ATR method sets the stop loss/take profit one ATR away from the entry price, with the ATR period being determined in the drop-down menu next to the selected methods. The range method works similarly but instead of using the ATR, we use a rolling range with a period determined in the drop-down menu next to the selected methods as well.

Unlike the available position management tool on TradingView, the entry can be determined from a cross between the price an an external source. The image above shows entries from the Volatility Stop indicator. This is particularly useful if you set positions based on trailing stops.

Versionshinweise:

Default value update

Versionshinweise:

Default Settings Adjustment

Versionshinweise:

Minor changes.