Forex Money Management – The Platform For Huge Gains How to Get itRight and Win

Most traders don’t have good money management and that’s a fact and have no strategy to contain losses and maximize gains but it’s the platform upon which huge gains and made and but most traders don’t spend much time on it… – Why?
Because it forces traders to monitor their positions and to take necessary losses and have a cut off point where their wrong, and very few traders like to do that.
To practice successful money management, a trader should take many frequent small stops and try to make profits from the few large winning trades by following the big trends.
Most traders don’t even do this, they insist on trading for small profits, in short time frames and place their stops in random volatility, all day traders and scalpers and they lose money
The fact is you will normally have more losses than winners when trend following – but your profits will be huge compared to your losses and to give you an example, I know a trader who harvests triple digit gains annually and losses 75.6% of the time! He makes such good money, because he keeps his losses small.
Most traders hate being wrong and always want to let a loss turn around or have no stop in the first place but when trading on leverage this leads to disaster. There is nothing wrong with losing, you are going to lose in Forex anyway, so accept it and keep your losses small.
Here are some tips to help you practice proper money management.
  1. Place your stop as soon as you execute your trading signal, so you are not tempted to let a loss run – mental stops don’t work for most traders so don’t try using one.
  2. While many say you should only risk 2% per trade, this is simply not practical on a small account so risk 5 – 10% but be more selective with your trades
  3. All trades are the same in terms of potential and there is no sure fire trade so don’t be tempted to bet big and a sure fire trade !
  4. Risk more when your winning and have profit and risk when your losing – your aim is preservation of equity at all times and its easier to lose open equity, than core equity.
  5. Don’t trail stops to close and get stopped out by random volatility! If it looks like a big trend hold your stop back and take open equity dips – you need to run the big trends to cover your inevitable losses
If you want to win you have to stay in the game and that means preserving your equity and if you do this, the market will give you big trends which you can run and help you make a great second income.
Cut your losses and run your profits, is a phrase every trader has heard and its true and its the only way you will money at Forex trading.
Use the above money management tips and they can help lead you to Forex trading success.

Comments

Post a Comment

Popular posts from this blog

Forex Trading Requires Some Caution

Forex trading, like all potentially profitable investments, can be risky. Here's how to arm yourself with the knowledge you need to keep from getting burned. Whether it is in the millions or thousands, trading in the Forex is a bit risky. There are a lot of players involved and if you don’t arm yourself properly with knowledge about the Forex you may just get swamped. The Forex is the largest, most vibrant market in the whole wide world. The financial world has never had a market that involves so much transaction. Over a trillion dollars worth of different currencies exchange hands everyday. Some lose in the trade, while some hit the jackpot and make tons of money. The Forex is characterized by its unpredictability and the liquidity because it deals with foreign currencies and each one's value influenced by their own country. That's why anyone who is greatly considering joining the Forex trade should think twice, thrice and maybe even ten times before doing so. This ...
Read more

The Forex Market-What, When and Why?

The Forex Market--What, When and Why? A detailed overview of this amazing financial opportunity... Forex, FX and the Forex market are some common abbreviations for the Foreign Exchange market. Actually it is the largest financial market in the world, where money is sold and bought freely. In its present condition the Forex market was launched in the seventies, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from demand and supply. As far as the freedom from any external control and free competition are concerned, the Forex market is a perfect market. With a daily turnover of over trillions of dollars, the Foreign Exchange market conducts more than three times the aggregate amount volume of the United States Equity and Treasury markets combined. The Forex market is an over-the-counter market where buyers and sellers conduct foreign exchange business using different means of co...
Read more

Forex Supply and Demand

The Reality of Forex Markets - Someone Needs to Say It By now I know that you the reader have scoured the search engines trying to find out how forex is the next millionaire ticket to financial freedom. It’s like clock work that everyone visits this same introduction to forex trading. What a lot do not realize is that the forex image is controlled by a majority of smart marketers. Deception of how the markets really work out are provided in the masses. True there is some truth told but most of the bad is skewed and left out. This is a very difficult thing for a beginner because this information is the foundation of what they learn. Forex markets work the same as any other market in the world. True there is different information that provides the base of the certain market but they all operate in the same manner. So what is the big secret that lies behind how the currency market works? Supply and demand. Yup, a simple economic principle is the over laying factor in price movement...
Read more