Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

0

Share

Download to read offline

Online Forex Money management

Download to read offline

Money management in Forex trading is one of the most important problems of new and even advanced Forex traders

Related Books

Free with a 30 day trial from Scribd

See all
  • Be the first to like this

Online Forex Money management

  1. 1. MONEY MANAGEMENT
  2. 2. MEANING  Money management in Forex trading is one of the most important problems of new and even advanced Forex traders. Almost everybody can find a good trading system that can be profitable but something that causes traders to lose and be negative at the end of the month, is lack of a proper money management strategy.
  3. 3. IMPORTANCE OF MONEY MANAGEMENT  Controlling Losses:  You could control your losses, by mental stop or hard stop.  Mental stop means that you already set you limit of your loss  A hard stop is your initiative to stop when you think you must to stop it.  Use stop and limit order:  Stop order are usually to limit losses in a trade profit in that currency pair price moves against the position.  Stop order can be used is to place the stop price slightly below the entry price on a buy or long trade the entry price on a sell or short trade.
  4. 4.  Limit use of leverage:  leverage can be a useful tool, but know when to use it. Remember that using leverage of any amount means borrowing money.  Leverage of 100:1 means a deposit of $1,000.00 can be used for up to $100,000.00 of trading. In this case, an unfavourable change of just 1% of the value of the currency is enough to completely deplete your margin account. To restate this perhaps more powerfully, with leverage of 100:1, a 1% change can result in a 100% loss.  The lesson to remember is that leverage allows for dramatic gains, and potentially devastating losses. Be careful with your leverage.
  5. 5. 2% RISK MANAGEMENT Trade Account balance Risking 2% of total account per trade 1 Start-5000 100 2 4900 98 3 4802 96 4 4706 94 5 4612 92 6 4520 90 7 4430 89 8 4341 87 9 4254 85 10 4169-17% of the account has been lost
  6. 6. 10% RISK MANAGEMENT Trade Account balance Risking 10% of total account per trade 1 Start -5000 500 2 4500 450 3 4050 405 4 3645 364 5 3281 328 6 2953 295 7 2658 265 8 2392 239 9 2153 215 10 1938- over 60% of the account has been lost
  7. 7. GOLDEN RULES TO SUCCESS IN FOREX  Only use money what you can afford to lose  Do not depend on luck  Check your emotional level before you trade  Keep displaced always  Plan the trade and trade the plan  Record everything in spreadsheet it helps to learn from your mistakes  Have breaks always  Trend is your friend don’t go against  Never try think tops or bottom – otherwise go to the casino and pick black or red
  8. 8.  Never change your position or close a trade without great reason  Try to avoid scalping for little profits and taking large losses if you scalp you need tight stops  Remove profits from your account regularly  Protect your capital, don’t risk all your capital on single trade divide into parts never lose more than 3% in a single trade  Quite while your ahead, never overtrade  Avoid trading after long period of failure-take a break, re look at your goals

Money management in Forex trading is one of the most important problems of new and even advanced Forex traders

Views

Total views

686

On Slideshare

0

From embeds

0

Number of embeds

9

Actions

Downloads

10

Shares

0

Comments

0

Likes

0

×