Money management is essential Back to list

Member SinceJul 08, 2021

Posts 549


Jun 22, 2022 a 12:24
Based on my experience, I would recommend merely risking 5% of your trading capital so that you do not lose the majority of your trading money if you have a poor transaction. Maintaining success in this area requires playing it safe. Losses become a fortune in this sector if we do not treat money management seriously.
To create an effective money management strategy, we must first determine what we want from Forex trading and then plan our trading strategy accordingly. It might be speculative trading, day trading, or swing trading. Our money management approach is mostly determined by our business style and objectives. A scalper, for example, requires varied lot sizes to trade, but a reasonable lot size for a swing trader may differ completely with the same money.
The type of instrument you trade is the second factor that determines your money management technique; for example, a trader dealing crude oil must utilise various lot weights. Forex dealers, on the other hand, can trade with varying lot sizes. The reason for this is that the amount of volatility varies each instrument. Commodities, for example, are more volatile than currencies. Having trades of the same lot mass on both trading instruments is thus unnecessary. Trading money is like gasoline for getting to your destination in the Forex market, thus we must utilise it wisely. Although this will assure our success and put us on the correct track, avoiding a high-risk method will save us money and safeguard our trading career.

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