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Money management

by Digit Link Online Business and Social Networking

Money management
is a way traders control their money flow: in or out of pockets. it's
simply the knowledge and skills on managing a personal Forex account.


Rules of good money management:

 

1. Risk only small percentage of total account

 Why is it so important? The main idea of the whole trading process is to survive! Survival first, and only then making money on top.Big traders first of all are skillful survivors. In addition, they usually have deep pockets, which means that under unfavorable conditions they are financially able to sustain big losses and continue trading. For the ordinary traders, the majority of us, the skills of surviving become a vital "must know" platform to keep trading accounts alive and, of course, to make good stable profits.


2. Rebuilding of a shrinking account is harder that it may seem to be

 There is a challenge: try on your demo account to rise up 300% or at least 100% of your original account trading as it would be real money. Will that be easy?


3. Calculate risk / reward ratio before entering a trade

 When chances to win in a trade are smaller than potential losses, don't trade! Remember staying aside is a position.


4. Learn to use protective stops 


About Digit Link Professional     Online Business and Social Networking

1,004 connections, 2 recommendations, 2,067 honor points.
Joined APSense since, March 29th, 2008, From Lagos, Nigeria.

Created on Jan 30th 2012 14:50. Viewed 100 times.

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