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| Dec 08, 2008 11:16 am |
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Forex money management |
| Anne Fonda
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For money management is the most important things to learn and know before leaning to live trades. Money management teaches us how to avoid the costly mistakes done by various new traders. Often they lose the entire amount of investment on the first hand of trade. Psychology is the most important factor to money management in forex no emotional attachment with the money how so ever. This is not very easy but it works successfully. Don’t allow yourself to get emotional on trade which can be an obstacle to trade properly.
Foremost you should consider leverage and risk. It is always for your benefit never risks more than two percent of your account balance on your trade. However, some experts say not more then ten percent but never more then that. This gives you ability to stand straight even if the market fluctuates, and suppose the market is not good and the trade goes bad you still got enough money to try again. You must prepare yourself for some bad day because you can’t win profit every day. Therefore, most traders will tell you what the best thing to do is keep your profit large than the losses.
Keeping track of your gains and losses would always work in your favor it would let you know whether the strategy is actually working for you or not. Or if you need you can rethink on your strategy. Never go blindly into trading without keeping a track of your result because you can loose all you money and won’t understand why it happened.
Last but not the least it is highly advisable to first practice a strategy on a demo account. Near about all brokers offers practice account with all the live features enable in it. This is the best way to test your strategy before putting your real money.
Private Reply to Anne Fonda (new win) |
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