When it comes to money management, it appears a lot of us rely on a fixed percentage per transaction.

IE) I am going to risk 2% of my account on every trade.

Well, what happens if you lose? Case and point: I begin with 10K and lose, now I have $9,800 in my account...

What do I do on my own next transaction? Trade 2% of 10K again or 2% of 9,800? You can see that since you lose repeatedly, your capital will fall to 50 percent after 25 losses in the prior....

But what if you were trading 2% of the CURRENT balance? Your admissions get smaller every time, along with your payout for a big win will be smaller. So to return to breakeven, you could need two or three big winners if you are in big drawdown.

I am leaning toward 2% of the highest balance for all trades.... That gives me room for roughly 50 winners at a row...