money management is needed when using leverage but only money management cant reduce the percentage of risks. you have to ensure proper analysis of trading , otherwise no way to avoid risk when trading practically.
Please correct if I'm wrong I think you talk about the different strategies, set on the pars you trading with different currency dollar. With the percentage of risks you are managed to lose if it's a big drawn -down while in the trade.
We all know that money management is essential and though leverage is a trading tool to borrow funds, we should not work with higher leverage due to insecurity issues associated with leverage. But emotions can be a barrier. In the hope that over trading or big invested capital will provide higher income a trader can make decisions of working with gigantic leverage and in turn he deals with higher hazards of losing capital.
walpants posted: if you dont use money and risk management correctly you will loose in forex it is that simple
agreed! i'd say, been there and done that. when i was a beginner i was hanging lose, my money was drenching and i had no idea what to do, but over the period of time i learned money management and how i can manage my risk with the leverage i had availed. today i am finally trading successfully because of that.
QuincyMCQuincy posted: With a small account you need to take risks though otherwise the profits are so low that there is no point
Well when trading you are always taking risks regardless the account size. The thing is to determine what is acceptable risk for you and keep it that way. IMHO I would rather risk 50$ of $200 account than 50$ of $200,000 account:)
Another thing is to define your stop loss the way it protect your account when necessarry but not too often.
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Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
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