Money management is the backbone of trading. By money management, I mean to include every trade in the plan. No more than a 2% risk can be taken for each trade. If your balance is 1000, then you can trade at 10 cents, which means 1 cent for every 100. If the profit is like 20 pips, you have to bring stop loss at the entry point.
Hi Aqissiaq & AliaDare and thanks again for the feedback.
I think you are only thinking of the trading side of things that I fully understand after trading for a number of years. However, what I am asking is more about how to manage your account system. For example adding in a system that stops you trading after you hit 50% of your previous days losses or reducing your trading risk after 1, 2 or 3 losing trades.
This is a big part in forex trading and is what moved me forward from a break even trader in forex. What I am trying to find out is what other methods or systems are people using in this area.
Money management is very important for trading. Don't risk more than 2% in a trade. Also I prefer not to open multiple trades at a time. If you open two trades at a time it would be 4% which is not good. Survival in the market is the first skill we should achieve.
UweMoench posted: Money management is very important for trading. Don't risk more than 2% in a trade. Also I prefer not to open multiple trades at a time. If you open two trades at a time it would be 4% which is not good. Survival in the market is the first skill we should achieve.
However, sometime I also open 2 or 3 trade in single day if I find good and potential trade. But I adjust my SL into my risk ratio what I set for per trade.
It is worth noting that money management is a very voluminous concept, but in the context of Forex trading, it boils down to several basic methods. They are quite easy to use and allow you to limit losses.
If you want to make money from this market, you need to have proper knowledge about forex trading. Without proper knowledge you can face a huge lose in this market. So, gather knowledge properly and then try to earn money from this market.
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