Money management is an important thing that is
always ignored by beginner traders . When
We talk about to money management, It will always move away
from the main desire of all
beginner traders that making them joining in forex trading bussiness . A Good money
management is never talked about how to get rich in a month or even in overnight .
A Good
money management is about
how to use the power of capital to trade in a safe manner
and not trade without loss because trading without loss is quite impossible to
do .
When you are surfing the internet you will
probably find a lot of traders who sell his trading strategies and saying that
they are selling is a Holy Grail Strategies that will make your trade without any loss . With
a few sweet words told you that you will be rich soon if you buy his strategy .
Do not be too affected because it is just a sweet words from marketer
. If you investigate further you will surely find a disclaimer page or maybe
some small sentences in places you do not seem that they are not responsible for
failure of using their trading strategies . You need to be more critical in digesting
it well .
It has been expressed by many professional traders that a great trading
strategy will be not working properly without good money management . Therefore you need to know a
few things so that you should
know if you want trading with good money management plan below :
1 . Consistent with the risk that you specify
When you trade, you need to find out how
much money would you
risked in each trade. This is very important because it
can help you to determine what the next steps will you apply when you
experience a loss in trading . Often a trader not consistent with their trading
risk then try to trade
with higher lot of trading in hope that they will get bigger
profit from it . You need to know that greed only bring you in destruction
. Perhaps by raising the risk of trading will give you a huge advantage in earning but
you should know that when you loss in trading you will losing your ability to
restore the loss of your trading margin with several trading technique such as
Averaging, Martingale, Even Hedging.
2 . Creating a rational target
A lot of traders want hundreds or even thousands of pips in their daily
trading. Here is one thing that becomes a problem in your trade . You target specified is too large and of course you should always know how much trading
skill you have. You should be know well about your
limitations. Understanding how much difficult to
predict the Market will help you know your limitations
about how much amount that you can get from the forex market . Currency daily range is important
too and it will help you to determining you target well without pass the range
so your target will be more rational to realize.
3 . Understand the limit of your patience
You need to know yourself more deeply about
the limit of your patience . Are you able to perform compounding by holding your profit
for several months without enjoying it until the time that you has specify? Or You are a type
that feel enough satisfied with a little profit and you can enjoy every
day . Everything is back again to you about how better you control
yourself. Everything that happens in the forex market always plays your
emotions . When you
have get loss or profit, A great hesitation and
patience always bet on yourself and wait for you to decide quickly and firmly what step will
you do when you 're in
a profit or a loss .
Hopefully this article useful for your trading
and can guide you in order to obtain the Holy Grail that you are looking for.
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