Knowledge and skills in money management cannot be acquired without proper experience. Just by reading the book, you will not be able to apply the accumulated knowledge in practice. But systematic training and practical application of the basics of money management will help you become a real expert in the field of Forex trading.
A walking person is always faster than a standing person
UweMoench posted: Money management is an integral part of forex trading. If anyone is not having any money management policy, he/she is never gonna be a good trader ever. You need to follow some good and realistic money management system.
100% i spent years just following blindly and not understanding the risks. i would make some profit and then blow the account was never managing anything. now i have been learning all the indicators have gone and the signal providers just using market moves price action an correct risk management now slowly building profit long term
Our total risk should not be above 2%. Now it could be 2% in a single position or all the open positions. Some traders take 2% risk per trade then open 5 trade which becomes 10% risk. We should not do this type of mistakes.
UweMoench posted: Our total risk should not be above 2%. Now it could be 2% in a single position or all the open positions. Some traders take 2% risk per trade then open 5 trade which becomes 10% risk. We should not do this type of mistakes.
For money management I maintain trading journal, this helps me to track that which strategies and trade amounts have gave me the good bunch and with that it also helps me to improve my further trades by looking at past areas of improvement.
Money management refers to understanding where and when the money should be invested and withdrawn according to the prevailing market conditions and trends. Having adequate knowledge about it is crucial for making investment decisions.