Need a Broker?
Please visit my sponsor website (new window opens)


Money Management.

This is a topic that ALL, and I mean ALL the tutorials go on and on about. The reason most traders lose is often not bad judgement, after all we are only adding up odds on the trades, anything can happen. But risking too much on a trade, not having a big enough stop loss to cover spikes before important fundamentals GBPUSD you know who you are.

So how do I work it out. This actually is cribbed from the following video which you MUST watch if you are new and losing money.

http://www.forexmicrolot.com/educational-videos.jsp?cmp=SFS-70160000000M5VFAA0

The video in Advanced on Money Management pretty much sums it up.

1. Only invest 5% of your total balance (if you have $1000, you’re investing $50 US).

2. Aim to make double the stop loss. So if your trade is $50 you should aim to tp at $100. But don’t just put that in, look at charts and fundamentals and work out HOW you will achieve the goal. Don’t treat this like gambling. There is a HOST of information and people willing to share their knowledge and views on the markets to inform your investment. Sadly, some of them are of completely opposing opinions of others. Especially on stock twits.

3. Watch the video on money management. It explains how losses can cripple your account so you cannot trade and make them back.

 

Leave a Reply