money manage and leverage

Money management is needed always actually, it doesn't matter whether you trade with leverages or not. Actually, if you will comply with money management and risk management practices then you will have less chances to blow your account. These rules are the main in trading activity and it's an inevitable part for every trader. Of course, there are some traders who like neglect money management practices, nevertheless they always lose their money because of this. Never try to take lots of risks on yourself without proper strategy and plan. It can lead to unpleasant consequences and can easily make you quit trading.

A trader should know proper money management and use the leverage to their advantage. Money management is the process of allocating funds in such a way that they can minimize losses and maximize gains. Leverage can be used to multiply gains or losses.

Leverage actually boosts your profit or loss multiple times. Try to minimize the usage of leverage in order to avoid capital losses.

Managing money is more difficult than earning money. Taking a little risk is very important to make money but it is important that you must take calculated risks.

A friend of mine who trades professionally told me that the best leverage is low leverage such as 1:1 or 1:5. He told that such leverage is the best thing for long-term trading because in this case you will not be kicked out of the market if a big pullback occurs.
Well, I tried those leverage sizes on a demo account. He was right as for pullbacks. With such leverages, they are not scary anymore, but it raises one question. To trade with such leverages, you need to deposit more, while leverage allows to save. I think it makes sense to keep trading with higher leverage, putting aside a certain percentage of earnings on a separate account where you could traded with very low leverages. On the other hand, if you have extra money, you can try trading with low leverages from the very beginning.

If you want to use leverage just work out your risk amount on every instrument on your exact stop loss!
If 2% of your account works out to $200 - and you want to use a 20 pip stop loss - adjust your lot size to get exactly that pip value and you will not lose a sent more.
Different leverages will give you different pip values, but on your one account you are not going to change it.

WimConrad posted:
If you want to use leverage just work out your risk amount on every instrument on your exact stop loss!
If 2% of your account works out to $200 - and you want to use a 20 pip stop loss - adjust your lot size to get exactly that pip value and you will not lose a sent more.
Different leverages will give you different pip values, but on your one account you are not going to change it.

Yes, this is quite right

Labelled as a double-edged knife, leverage is a financial instrument that enables the traders to borrow capital for gaining exposure and to maximise profits. It is very important for traders to strategise, minimise and effectively manage leverage as well as risks associated with it as highly leverage trades often lead to depleting trading accounts and liquidation.

its a fine reply with good information , thanks for your nice reply.

Money management is extremely important when it comes to trading using leverage as over-leveraged accounts often lead to depletion of funds. Further, if the trader fails to cover up, it leads to liquidation of all trades.

Leverage is one of the few things that attracts a number of traders to forex but it also holds the tendency to offer a bitter-sweet experience to traders. If not used carefully, leverage can deplete all your trading capital and leads to liquidation of trades. Therefore, it is important to follow solid money management rules while using leverage.

AwareWeekly, as a professional he`ll trade with millions may be. Then he`s absolutely right. But for a simple retail traders the bigger leverage is needed because they`re using way low funds.

Leverage, often labelled as a double-edged sword, can often turn into a disaster for traders who fail to use it with proper money and risk management strategies. An overused leverage and a mismanaged account often leads to margin calls from forex brokers leading to a disruption in activities as well as liquidation of all trades in extreme situations.

Jamerson posted:
As a beginner in forex, how can money management help me in forex trading and which is the best leverage to use?

Money management will help you to survive in the market for a long period of time. By applying money management techniques you will not easily blow up your account. As far as leverage is concerned, use small leverage initially.

Of course, most system os money management doesn't imply trading with leverages, however as far as I am concerned, some traders include leverag trading in their money management strategies. Everything because money management just implies how much money you can lose without any hesitation. Of course, it also implies how much money you can devote to the particular position and so on so forth. However, I believe that new traders have to avoid leverage trading because it's just the easiest way to lose all the money for them. Professional traders can either use leverages or ot, it's up to them, because they have experience.

high leverage means high risk , its not true exactly, if there is any risk it is complete with nonsense planning or zero risk management, nothing without it.

that is a perfect message with leverage as well money management.

Your trading career depends on the choices you make. From deciding when to open a trading position to determining how much leverage you wish to use, you have to make all the important trading decisions on your own. But one thing has to be common for all the choices, it must never go beyond your risk appetite. A risk management strategy can work great here.

Money management is definitely a fundamental thing in trading. Actually, you can ask a trader to count all the fundamental things in trading and he will be doing it during several hours... hahahha :D because traders think that everything is fundamental.

gotta count the main ones, money and risk management; wise approach; lack of greediness; learn and practice; using demo.

These are the main ones at least for me personally, maybe some other traders can add something to this list. I consider it exhaustive. Yeah, perhaps.... I can add here emotions control. Without it, traders would ruin their trading activity and destroy their accounts.