Monday, 4 April 2016

Key Secret To Successful Forex Trading - Money Management

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Key Secret To Successful Forex Trading - Money Management

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Forex Blog About Money Management

This forex blog about money management. As you probably know, a key secret to successful Forex trading is money management. However, most forex traders, especially new forex traders, experience a problem. This is why experienced traders, that is those that have survived, consistently indicate, solid rules on money management is a key to successful Forex trading.

Money Management & Risk. Money Management is a crucial element of trading the financial markets especially in times of volatility. It is a defensive concept that keeps you in funds so you can trade another day and underpins profitable performance.

Money Management / Risk Management is the key factor that is the difference between success and failure especially when using leverage. Risk management should be seen as a positive part of your trading armoury. If you use it in a premeditated strategic fashion, solid risk management can be used in an offensive and profitable way.

Forex trading is not new. It has been making people rich for decades.


Then why do so many new traders lose their money? How can you prevent these loses?  Strangely enough a good trading system or strategy is only part of the answer.

Successful traders use good money management and broke former traders use poor management.

Good money management is the realisation that using a small percentage of your capital is a smart place to start. If you don't manage your capital it is tantamount to going to the casino! The number one reason why individual retail traders fail is through a lack of understanding or application of money management principles. Most traders utilise leverage without any knowledge of how this wipes out trading accounts time and time again due to normal market volatility. Our approach is focused on optimising investment growth by utilising strict risk management principles and trading techniques.

One of the key rules is never risk more than 5% of your account on any one trade.  This is not rocket science.  This basic rule applies to Forex, futures, stocks, commodities and options.

Then why do so many Forex traders, new traders mainly, not follow this basic money management rule?  Lack of discipline, emotional trading, wanting the big score and impatience are a few of the reasons.

Most Forex trading systems that you can purchase have money management as a core part of the system.  If it does not, get your money back and find another system.

Some believe, for manual systems, money management may be as much as 80% of the Forex trading plan.

Money management is the difference between gambling at Forex and trading Forex like a business.  Proper management can make your trading system more profitable.

A rapidly growing area in Forex is automated Forex trading software.

Why?  There are a number of reasons, not the least of which is that money management is built into the better Forex robots.  Additionally, many other trading parameters are built into the robot.

With an automated Forex trading robot, trade share made under strict guidelines and the robot does not enter or exit a trade based on a whim or feeling.  Plus, based on the criteria that you set, with money management built into the Forex robot it will not place a trade that is to large for your account.

Are you beginning to see the simplicity and security of making money in Forex?

Key Secret To Successful Forex Trading - Money Management