What to do with the Money Management and In The Money / Out

of The Money Document

On your trading journey, it may be helpful to visualise what growth in your account could
look like and what you need to do to accomplish it.
Not only that, but it may also help stop mistakenly over-sizing your trades.
This is where this document may help.

Simply fill in the 3 golden boxes:

Your account size in $ goes in Box 1

When you enter the amount you have with your broker, the boxes in shades of orange next
to this will tell you how much 1% investment equates to or 2 %, all the way up to 5%, to
give you an idea of what you are putting on the line. For example, if your account is $1,000,
1% will be $10

Your trade amount in $ goes in Box 2

Put any trade size you like in Box 2 and the cell underneath will work out the investment-to-
account size percentage. For example, if you have an $800 account and enter $20 as a trade
size, it will be 2.5%

Your payout from your broker in % goes in Box 3

This defaults at 80% here but obviously this will change very frequently in your trading. This
leads on to the ITM/OTM table:

ITM/OTM Table (The road to growing your account)

Below the trade calculator is a table that calculates trade outcomes on any given investment
if it is ITM or OTM. In addition, this table will calculate your balance if you go on a run of
trades in any combination between 1-20 ITM or OTM.
For example, with a starting account of 1K, and consistent trade sizes of $10, a run of say, 7-
3 ITM-OTM will result in $1,026, if the broker offered you 80%.
Looking to the green and red shaded boxes in the top right, this legend shows that is enough
for between 2-3 % growth.
The broker payout % is simply an example to help this all work.
The colours in the result areas will change depending on trade size
For example, with

a 1K account,
a trade size of $30
and a broker payout of 80%,
a score of 3-0 is sufficient to get you >6% growth (7.2%)
But
Flipping that, 0-3 will result in >6% loss (in fact 9%)
Ultimately, this hopefully shows the power of accuracy and avoiding OTM, by possibly
overtrading
Because the numbers are all laid out to see that a score of 3-0 for example, is better for your
account than all of these:
4-1
5-2
6-3
7-4
8-5

Safe Trading!