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Withdraw a Fixed Amount Every Month - Money Management

by The trader, 1023 days ago
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Using this money management script, you can simulate the effect of withdrawing a fixed amount of money, every month, from your portfolio.

The script allows you to enter the fixed amount to withdraw and to determine whether to withdraw money on each month or only on months that show positive returns (Portfolio equity increases in this month).

Money Management Variables:
Withdrawal/Month: Set the amount that will be withdrawn each month
Portfolio: Set to one to withdraw only if the portfolio's previous month return is positive

Example:
Withdrawal/Month = $1000
Portfolio = 1

In this example, by equity we mean total positions size.

Month 1:
Starting Equity = $10000

Month 2:
Starting Equity = $11000 (10% return)
Withdrawal = $1000
Total Cash = $1000
New Equity = $10000

Month 3:
Starting Equity = $9000 (-10% return)
No withdrawal because equity return in Month 2 is negative

Month 4:
Starting Equity = $9450 (5% return)
Withdrawal = $1000
Total Cash = $2000
New Equity = $8450


You may see the effect of withdrawing a fixed amount of money by plotting the cash time-series on the report chart.

In the trading system report and next to "Select a time-series to drag and drop ...", select "Cash" then click on "Drag" to drag & drop this time-series to a chart's pane.

You can try several withdrawal amounts by optimizing the "Withdrawal/Month" variable and then backtest each one of them by clicking on "Optimize".


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Type: Advanced Money Management

Object ID: 1047


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Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.