Cozy101
19-08-2009, 09:03
Hi all,
This is my small effort to help newbies who sometime misses this important aspect of trading "Money Management". I feel the best plan is the plan you make for yourself.
Create your own money management plan. How do you do that? You know your goals and objectives in forex trading. You also know the kind of money you would use to fund your trading account. Now do the calculations and figure out how much you could really risk per trade. Of course you would have to follow the golden rule of not investing more than 5% per trade or even less to be more comfortable. Write the figures down and keep it in front of you every time you trade. Those are the limits you have set yourself. Keep it in front of you every time you trade. Reminding yourself of your own limits in trading is a wise way to help prevent you from overtrading.
Money management is a skill you have to develop over a period of time. It is a skill that will help you keep grounded and help eliminate temptation and overconfidence. Never have the false notion that you would win your trades all the time. No you can’t always win in forex trading. But having a money management policy will limit your losses so that you live to see another day in forex trading which could well turn out to be successful. If there is one thing that money management plan can help you, it is to help prolong your forex trading activity. If that happens you could be on the road to profits.
This is my small effort to help newbies who sometime misses this important aspect of trading "Money Management". I feel the best plan is the plan you make for yourself.
Create your own money management plan. How do you do that? You know your goals and objectives in forex trading. You also know the kind of money you would use to fund your trading account. Now do the calculations and figure out how much you could really risk per trade. Of course you would have to follow the golden rule of not investing more than 5% per trade or even less to be more comfortable. Write the figures down and keep it in front of you every time you trade. Those are the limits you have set yourself. Keep it in front of you every time you trade. Reminding yourself of your own limits in trading is a wise way to help prevent you from overtrading.
Money management is a skill you have to develop over a period of time. It is a skill that will help you keep grounded and help eliminate temptation and overconfidence. Never have the false notion that you would win your trades all the time. No you can’t always win in forex trading. But having a money management policy will limit your losses so that you live to see another day in forex trading which could well turn out to be successful. If there is one thing that money management plan can help you, it is to help prolong your forex trading activity. If that happens you could be on the road to profits.