Money Management is the most important and first thing to consider when thinking about trading the forex market. Infact, I believe it is much more important than a good trading system or great trading signal .

A prudent Money Management plan will force you to use much less margin than most retail traders. My opinion is to never open a position greater than two times your account balance. A lot of sites/gurus talk about risking anywhere from 2%-5% of you trading capital in any one trade.

I say,THAT’S INSANITY!

I say keep your individual losses on each trade between 0.5% and 1.5% and never be exposed to a greater than 5% loss over multiple trades. That means trades that are usually no bigger than 1X your account balance, and usually less.

But what about the 400:1 margin?….you don’t need anywhere near that much, infact 20:1 is probably too much. The brokers give endless credit(margin) to entice people to trade irresponsibly because they make money on volume, they don’t care if you make or lose money, either way they are earning.

Remember this, if you make on average 25 NET pips per day and use ZERO margin, taking positions only equal to your account size, you’d be generating a 5% return each month and by scaling up your trade size as your account grows, returns of 80% per year are quite possible.

 The Most Freakish Millionaire Tactics You’ll Find Here! 

  The Most Freakish Millionaire Tactics You’ll Find Here!

Forex Money Management – The Biggest Mistake Traders Make

The Forex Robots money management systems are either, non existent or take far too much risk per trade. What most traders don’t realize is the track records are created in hindsight and to make a profit on paper, the vendor bends the …   Read more…

Critical Mass – Mandatory money management?

Mandatory money management? Last week, Maurice Black and I published an essay on what colleges and universities should be doing to make sure students graduate knowing how to manage their money — and knowing the nuts and …   Read more…

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Abacus battles tough year

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Track Your Financial Worth with Money Management Software

Losing count of what you have and what you spend can be a dangerous thing. I’ve come across people who have made the fatal mistake of overspending or, worse, spending money that they don’t have and won’t probably earn in a long time.   Read more…

CloneRich: Financial or Loan Problem,Make & Save Money Resources

WHAT ABOUT ONLINE MONEY MANAGEMENT PROGRAMS? POSTED BY : SAMANTHA A. BOW. Money direction gets more arduous as your income sources and expenses process and embellish more difficult. There are some assorted programs you crapper ingest to …   Read more…

By: Francis Bowman

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