Money Management
ForexThinker.com
Manage risk. Trade better.
Proper management of cash in a trader's forex account helps him/her attain
better returns and also survive periods of draw downs resulting from:
1. Adverse
fluctuation(s) in currency prices. 2. Consecutive losing signals generated by his/her forex trading system.
In addition, setting money management rules for online trading the signals
of a system simplifies the process of deciding how
much of a currency to buy or sell when acting on a signal from the
currency
trading system. Therefore, money management plays a vital role in
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the success of a forex or currency futures investor and also in making
currency trading easier.
Foreign exchange traders can set their own rules and criteria for managing the cash in their currency trading accounts. However, ForexThinker.com advocates a conservative money management approach in order to maintain at all times a well capitalized account and suggests that as a general rule a forex trader use 20% or more of the cash available in his/her account as margin payment to buy or sell an amount of currency, even though the majority of online forex trading platforms have a 3% - 5% margin requirement and at some firms the requirement is as low as 2%.
Foreign exchange traders can set their own rules and criteria for managing the cash in their currency trading accounts. However, ForexThinker.com advocates a conservative money management approach in order to maintain at all times a well capitalized account and suggests that as a general rule a forex trader use 20% or more of the cash available in his/her account as margin payment to buy or sell an amount of currency, even though the majority of online forex trading platforms have a 3% - 5% margin requirement and at some firms the requirement is as low as 2%.
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ForexThinker.com currency trading formula:
money management + viable trading system+ self discipline=
Successful Currency Trading
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ForexThinker.com currency trading formula:
money management + viable trading system+ self discipline=
Successful Currency Trading
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ForexThinker.com suggested money management approach can be explained
further with the aid of these examples:
Q: What
can be
a detrimental
mistake for a
trader?
Ans: Overtading.
Establishing too large of a position in the market.
a detrimental
mistake for a
trader?
Ans: Overtading.
Establishing too large of a position in the market.
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