What is money managment in forex?
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  • #1 Collapse

    What is money managment in forex?
    What is money managment in forex?
  • <a href="https://www.instaforex.org/ru/?x=ruforum">InstaForex</a>
  • #2 Collapse

    Hi,
    This is Muhammad Nabeel .
    I am here to share my knowledge about money management in Forex.
    Introduction:-
    Money Management in Forex is defined as the calculation and management of amount to be invest per trade. A person should have complete knowledge of money management.
    Improper money management can also lead to the failure



    Tips for Proper Money Management in Forex:-
    Here I am giving some most dominant tips which can be used as money management tips.
    * You have to know Risk Per Trade. Basically it is amount of your trading account, which you are going to put on risk in a single trade.
    * Assume Reward to risk ratio of trades.
    * Use stop losses regularly.
    * Wisely use the leverage
    * Don't involve your emotions in trading.
    *
    Always keep a trading journal and seek help from it.

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    • #3 Collapse

      What is money management in forex?

      In money management weWill learn how to manage our account.
      What will be our lot size.
      Where our SL should be.
      Where our TP should be.
      Where should and & should not trade our market.
      Money management in forex is one of the most important problem 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 proper money management strategy discipline. Although money management is so important and critical.
      Strict money management is essential to achieve long-term success in the forex market.

      Example of money management.
      Your lot size should be as per your account equity.
      Equity. Lot size
      100$. 0.01
      200$. 0.02
      300$. 0.03
      400$. 0.04
      500$. 0.05
      600$. 0.06
      700$. 0.07
      800$. 0.08
      900$. 0.09
      1000$. 0.10
      2000$. 0.20
      10000$. 1.0

      Per trade risk should not be more than 5%.

      How to calculate 5% risk of our account?
      Let's suppose we have an account of 1000$ balance.

      5% of 1000 = 50
      If our SL hit we loss = 50$
      Remaining balance will be = 950$
      Again we trade with
      5% of 950 = 47.5
      If our SL hit we will lose = 47.5$
      Remaining balance will be = 902.5$
      Our account will decrease slowly one given trade will not wash the account.

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      • #4 Collapse

        Money Management in Forex Trading

        When it comes to forex trading, there are many important things we need to take seriously - but money management is arguably the most important thing to a trader. Most newbies spend almost all their time waiting for the right moment to enter the market as well as when to exit, and don’t give much attention to money management. If you don’t address your money management system properly, your trading career might come to an abrupt end.

        The forex market is highly unpredictable, there’s no way anyone can win consistently all the time. There will always be a time you lose some pips, and there will be a time when you win some. When you open a trading position, there are two things involved – it’s either the price moves against you or for you. When it happens, you strategize and evaluate. And when the price goes you way, you can breakeven and add more positions.

        By using this trading approach, you can minimize your losses and get multiple amounts of profits when you win. The best idea is not to use more than two percent of your trading capital. Additionally, don’t approach the market with any form of aggressiveness. The more aggressive you get, the more you lose focus. So just follow the flow of the market and stick to your trading plan.

        And lastly, endeavor to know when you’re wrong and cut your losses. There’s no magic happening, once you notice the market isn’t going according to how you planned it, cut losses and move on. The fact is sh#it happens at times, so don’t be depressed by the losses – think about the times you’ve been winning.

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        • #5 Collapse

          Money management in forex trading.

          Money management is a term that is used most commonly in forex trading. While trading in the real market if we don't make a rule for us and follow it strictly then it would be really tough to survive in this volatile market with leverage. We need to follow money management and plan ahead for each of our trade like what maximum percent risk we can take for a single trade.

          If we want to become successful in this business there is no alternative to having a money management plan and also executing the plan like clockwork. The most common mistake trader makes is that either they follow it for some time and when they are in a losing streak they increase their risk to recover their losses which gives them more big drawdown and ultimately this cycle continues until they get a margin call.

          Consequently, if we can't find an edge in the market only money management won't be enough because not all traders have patience and only surviving won't be enough for this business, the main goal is to make profit but with such risk so that the capital remains safe and only by using a money management rule we can avoid that.

          The rule of thumb for money management is when the equity falls we need to adjust our risk and make it more lower so if a trader is risking five percent per trade then he should calculate this with the currenty balance. For rising equity the rule would be same.

          Finally, I want to say that money management is the cornerstone of forex trading if a trader don't follow it and risk a small percent everytime the trader is highly likely to lose their capital very soon. So following it should be every trader's main objective.
          Yesterday's wins and losses are yesterday's wins and losses -- and the yesterdays are gone :luvmt5:

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          • #6 Collapse

            What is Money Management
            Money management can be regarded as a type of strategy that is used in the forex trading by traders for the purpose of limiting risk and also to minimize loss while trading in the forex market. The concept of money management is typically used to prevent huge loss in the market. It helps traders to protect their capital and give them the opportunity to trade next time when the money management is properly used, and the risk is correctly calculated. This is one of the skills a trader is expected to possess in the market due the nature of the forex market which is said to be the most riskiest and most challenging financial market in the world. This type of strategy is basically used by experience traders because they are familiar with the nature of the market.

            There are basically two ways a trader can make use of money management in the forex market. The first way is to by taking consistent little stops in trade for the purpose of making profit from few large profit making trades. This type of method deals with traders psychology. The second way to make use money management successfully in the forex market is by making few large stops in trade for the purpose of making many small profits that will cover the few large losses suffered by the trader in the forex market.

            Advantages of money management in forex trading
            These are some of the advantages of proper money management in the forex market.
            1. Proper use of money management in the forex market is use to reduce loss and also to limit risk if the risk is successfully calculated.
            2. Money management preserves traders capital in the forex market.
            Attached Files

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            • #7 Collapse

              the money management
              yes mate the money management is to limit the losses we may receive Because we realize that trading is a business that is full of risks we as traders must be able to manage the risks involved in trading to our advantage in the future because risk management is very crucial in our trading Because money management is not healthy we will experience losses in trading which can cause us to experience losses in trading I totally agree with what you explained above capital for trading must indeed be free money in the sense that it is not kitchen money not money from loans or money for education savings This is to prevent regrets when something undesirable happens in the future Money management is very important in trading because it directly regulates the risks we take in trading
              learning of the management is most important
              In fact in my opinion it is very easy to learn in theory about money management because it is difficult to practice our learning outcomes about money management many of whom already understand money management but in reality they often fail compared to success because it is still wrong to practice money management before we carry out trading transactions using large deposits we must first test our management skills on accounts with smaller deposits so that we are able to master good and planned money management after we feel good enough in carrying out money management on that account money management to learn to exercise discipline in the control and management of good money management it would be nice to learn demo accounts, if we feel we can run good mm discipline, then we need to try real accounts as real accounts that will determine whether we can achieve results or not when we already able to run well so to achieve success in the world of forex business will be easier.
              advantages of the money management
              RISK MINIMIZER
              the money management is the key to minimizing risk in trading itself whereas to be successful you must be able to master the strategy and analyze the market so that if we have mastered everything In trading we are not always profitable or rewarded there must be loss or what I will call risk Therefore we need the right risk n reward ratio For example I use a ratio of 1 to 3.
              Attached Files

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              • #8 Collapse

                Money Management. What Is It?

                Money management is a technique that traders use to mitigate any potential risk that you might encounter during your trades and the goal is ultimately to reduce your risk exposure and at the same time increase your profit potential. This is very important for anyone who is trying to pave a solid way toward sustainable profit and career in this business. The trading world is not a forgiving career and it has a lot of potential risks involved in it and it’s the number 1 reason why the majority of traders eventually left the business because they lose money. One thing about the trading business, especially forex trading, that you must understand and that is you can’t avoid loss BUT you can limit your loss. What this means is you can do many things to limit the number of your losing trades AND when you have a losing trade your loss will be minimal in comparison to your profit. This is the essence of money management and why it’s super important.

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                How To Do It?

                There are some techniques that traders can use to manage their risk but before that, you must understand that risk management is different from trade management. Trade management deals with how you should manage your trade AFTER it’s already running but risk management is something that you do BEFORE you enter a trade. So what are the techniques that can be used to manage risk? Let’s check them one by one…


                Types Of Money Management

                Fixed lot money management
                Those who are using this technique use the same lot size for all of their trades. So for example you have a $10,000 trading account and you decided to use this money management technique then you have to choose the lot size that you will use and stick to that lot size. So if you decide to use 0.01 lot size then you use it for every trade.

                The advantages of this money management technique:
                • It’s very simple to do because you only need to decide the lot size and that’s it.
                • There is no need to calculate anything.
                • Your risk will decrease as your trading account grows because you use the same lot size.


                Your lot size will be calculated as:

                Balance: $10,000
                Lot size: 1 standard lot
                Stop loss: 10 pips
                Dollar risk is: 1 lot x 10 pips = $100
                Percentage risk: $100 / $10,000 = 1%

                As your balance go up your dollar risk will be:

                Balance: $15,000
                Lot size: 1 standard lot (stays the same)
                Stop loss: 20 pips
                Dollar risk is: 1 lot x 20 pips = $200 (as stop loss increase the dollar risk also increase)
                Percentage risk: $200 / $15,000 = 1.3%

                When your account decrease your dollar risk will be:

                Balance: $7,000
                Lot size: 1 standard lot (stays the same)
                Stop loss: 5 pips
                Dollar risk is: 1 lot x 5 pips = $50 (as the stop loss decrease the dollar risk also decrease)
                Percentage risk: $50 / $7,000 = 0.7%

                The disadvantages of this money management:
                • The risk per trade will vary from trade to trade depending on how many pips you put for your stop loss.
                • When your trading account is losing, your loss will become bigger percentage-wise because your trading account is decreasing but your lot size is still the same as before.
                • The risk per trade does not follow the growth of your trading account that is why even though the risk per trade will decrease as the account grows the risk is not effective and efficient.



                Fixed dollar money management
                This technique is similar to the fixed lot money management but in this technique you use fixed dollar instead of fixed lot size. So for if you have a $10,000 trading account you will decide how much risk you will take in terms of dollars. If you decide to use $100 per trade then you will need to adjust your lot size according to the stop loss pips.

                The advantages:
                • Your risk will decrease as your trading account grows because you will always use the same amount of dollars as your risk per trade for every trade.
                • No matter how many pips you use as your stop loss your risk will stay the same
                .

                You will need to adjust the pips to fit the dollar risk and this is how you do it:

                Account: $10,000
                Dollar risk: $100
                Stop loss: 10 pips
                Lot size is calculated as follows: $100 / 10 pips = $10 which is equal to 1 standard lot.
                Percentage risk: $100 / $10,000 = 1%

                If your stop loss for the next trade increase (in pips) then you adjust your lot size:

                Account: $15,000
                Dollar risk: $100
                Stop loss: 20 pips
                Lot size is calculated as follows: $100 / 20 pips = $5 which is equal to 0.1 lot (1 mini lot).
                Percentage risk: $100 / $15,000 = 0.6% (risk is decreasing when account balance go up)

                If your stop loss decrease in pips then you adjust the lot size again:

                Account: $7,000
                Dollar risk: $100
                Stop loss: 5 pips
                Lot size is calculated as follows: $100 / 5 pips = $20 which is equal to 2 standard lots.
                Percentage risk: $100 / $7,000 = 1.4% (risk is increasing when account balance go down)


                The disadvantages of this MM technique:
                • As your trading balance decreases (due to losses), your risk per trade gets bigger because the dollar amount that you risk stays the same.
                • When your trading account grows your risk does not follow it proportionately so you are sacrificing account growth by using this technique.



                Fixed percentage MM
                This MM is centered around locking your risk per trade to your account balance by using percentage. The way you determine your lot size will be by first choosing your risk per trade that you are willing to accept in terms of percentage. The formula will be as follow:

                Balance: $10,000
                Percentage risk: 1%
                Dollar risk based on percentage is: $10,000 x 1% = $100
                Stop loss: 10 pips
                Lot size is calculated as follows: $100 / 10 pips = $10 which is equal to 1 lot.

                And as your balance increase your lot size is adjusted to:

                Balance: $15,000
                Percentage risk: 1% (risk stays the same)
                Dollar risk based on percentage is: $15,000 x 1% = $150
                Stop loss: 10 pips
                Lot size is calculated as follows: $150 / 10 pips = $15 which is equal to 1.5 lot.

                As your balance decrease your lot size will be:

                Balance: $7,000
                Percentage risk: 1% (stay the same)
                Dollar risk based on percentage is: $7,000 x 1% = $70
                Stop loss: 10 pips
                Lot size is calculated as follows: $70 / 10 pips = $7 which is equal to 0.7 lot (7 mini lot).

                The advantages of this MM:
                • The risk will follow the account balance and it’s not affected by how many pips your stop loss is and also not affected by the increase or decrease in account balance.
                • When your account grows your risk will stay the same in terms of percentage.
                • When your account shrinks your risk will also stay the same because it’s based on percentage.


                The disadvantages of this MM:
                • As your trading balance increase or decrease you must adjust your lot size
                • When your stop loss changes your lot size must also be adjusted
                • The potential profit might increase or decrease based on the size of your stop loss. Big stop loss makes it harder to get big profit



                R- Multiples (better known in the forex community as RR or risk to reward ratio)
                This technique is actually the development of percentage based risk like I already mentioned before but with added element of target profit instead of just talking about risk. This concept was first introduced by Van Tharp in his book and it’s a concept where your profit potential is determined by the multiple of your risk. When you are using this method you are essentially limiting the loss while promoting the potential reward. This concept is known as RR or simply R and the generally accepted multiple of R is anywhere from 1.25 to 3R. This means when you get profit then you will get 1.25 times the amount (in dollars) that you risk. In the case of 3R, when you profit you will get 3 times of what you risked. Some people like to set big R for their trades but you should only attempt to aim for bigger R after you become good at trading so don’t attempt this when you’re just starting out.


                Layered MM
                This technique is the advancement of the RR concept that I just mentioned before. By using this technique you are splitting your position into a couple of smaller-sized trades. So instead of using 1 standard lot then you will split it into 2 trades of 0.5 lot each. And then, in each position you will put a different profit target. For example, you can set the first trade with 2R and then the other trade with 3R.


                Which Money Management Is The Best?

                The question is not a simple one because each trader has a different opinion so we can’t really say which one is better than the other because all of them have their own strengths and weaknesses. The best way for you is to test them on a demo account and see which one can bring better overall results for a period of at least 3 months.

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                Conclusion

                Money management is a critical element in your trading strategy. Even the best trading strategy will collapse if you don’t have a good, reasonable money management system. Make sure to test which money management is the best for you by using a demo account.
                You only need to read THIS ARTICLE to make money from forex trading,

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                • #9 Collapse

                  Money management in Forex trading.

                  The concept of money management is very important to have an idea of by every trader. Money management simply equates to managing one's money from getting lost to the market. By managing one's money properly, a trader is building foundation for himself in Forex trading, and this is the only way to remain a Forex trader for a long time.

                  However, it is surprising that many new traders nowadays do not care about managing their money wisely. All they are after is to amass quick money from the foreign exchange market. And this is why there are many failures in the business. Because, there is no way a building can be properly built without first laying a foundation. Understanding how money management works is one of the foundational steps to be taken by traders in Forex trading.

                  How to apply money management in Forex trading.

                  The first way to apply money management when it comes to trading in the foreign exchange market is to have understood the basic of Forex trading. Forex trading is complex. There are millions of participants in the business and more are joining daily. Thus, in order to make the best out of the market, a trader must have adequate knowledge of how trading works.

                  In addition, another way to apply money management in the Forex trading business is to avoid greed and impatience. Research has shown that these two factors are part of the reasons Forex traders lose their discipline and then lose their money in the long run. If a trader is not greedy and he is patient, then there is tendency that he will manage his money properly rather than seeking quick money that can make him lose his money.

                  Lastly, money management technique can also be applied by traders in the Forex world by learning and making use of different risk management in Forex trading. These techniques are also helpful and can support traders not to fall into unnecessary risks and aids them to manage their money well.

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                  • #10 Collapse

                    Forex traders often lose huge money during forex trading because they don't have control over their losses. They don't know how to protect their trading account from any huge losses. Even experienced traders lose money in the forex market but this is very minimal compared to their profitable trades. Actually, they follow proper money management and this is a proven tool for us to protect our trading account from any heavy downfall.

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                    Success in forex trading always requires a good trading strategy and a proper money management system. This is very important for us to understand that the forex market is not always predictable, losses may occur at any time. If we do not focus on money management then we may lose every penny in no time.

                    What is money management in forex trading?

                    The money management teaches us how to manage the risk in our trades. That's why it is also called risk management. How much a trader willing to lose in a trade? And what is the risk-reward ratio? What will be the lot size, stop loss level, take profit level and leverage, etc? These are an important part of the money management system.

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                    Money management can be utilized as a strategic tool to protect our trading account. At the same time, it'll help us to get a standard growth in our trading account. We'll able to maximize our profit by reducing the risk and losing the amount. We can make the forex trading profession a profitable business only through a good trading plan along with money management.

                    Even a trader has an average performance record it is possible to become profitable. A trader can make a lot of money only by utilizing their existing skills and with the inclusion of money management. If we look around many successful traders then we'll find that they are more concerned about protecting their account from huge losses. They cut losses early in the form of stop loss and keep open profitable trades to grab more out of each trades.

                    To implement money management efficiently into our trading system we've to follow the following steps:

                    1) Risk minimal amount: One of the most important parts of money management is to fix the losing amount. Before going for any trade this is required to calculate how much we're willing to lose in a single trade. For example, we should go for only 1% or 2% risk as a maximum in a single trade. Suppose a trader has $500 in his or her trading account. Then the trader must fix the risk percentage, and 2% of $500 is $10.

                    So here the trader must fix the losing amount to $10 for a single trade. This is 2% of the whole trading equity. This is a great way to protect our trading account from any heavy losses. We can control the losses by putting stop loss into our trading position. If we think the price won't go in the right direction then we can also cut losses early.

                    This is also depending upon how much equity we've in our trading account. If we've more equity then we can even reduce the risk percentage to the minimum. Suppose we've 10,000 account balances then we can risk 0.25% of this equity in a single trade. 0.25% of the 10k account is about $25. And 0.25% of $500 is only $1.25. So it depends on a trader how much a trader is willing to risk into a single trade.

                    2) Use stop loss and take profit: In order to fix the risk percentage, this is important to put stop loss into our trading orders. Along with stop loss, we should go for taking profit too. The stop loss will help us to control the losses, on the other hand, take a profit level will help us to book profit on the desired level.

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                    This is not possible to monitor our positions all the time. Stop loss and take profit will work even we do not open our trading terminal. So this will manage our positions without any manual effort. In the background, it'll handle everything in an efficient way. Neither we'll need to cut losses manually, nor we've to book profit manually if we've already put stop loss and take profit into our trading positions.

                    Before putting stop loss into our trading position we must consider the following:

                    Stop loss should not be placed very near or too far from the entry-level. If we put stop loss very near to opening price level then we may get stop loss hits too often. On the other hand, if we place stop-loss very far from opening the price level then our take profit level will be wider than the normal level. Because take a profit's pip level would be more than stop loss pip level. For example, if a stop loss is 200 then the take profit would be 400 in case we're following a 1:2 risk-reward ratio.

                    3) Use standard lot size: There is a great relationship between stop loss and lot size. And both are inter-related to each other. We can't ignore any one of them and both are equally important for us to consider for the money management system. Stop-loss level can be increased or decreased based on lot size volume. On the other hand, lot size volume can be increased or decreased based on the stop loss level.

                    Suppose we've $500 into our trading account. If we like to put stop loss at 50 pips. In case we want to lose 2% then it'll be $10 as mentioned above. We can calculate the lot size based on the fixed stop loss level.

                    The calculation would be like this: $10 divided by 50 i.e. equal to $0.20. This means 1 pip value would be $0.20. If 1 pip value of 0.01 is $0.01. Then lot size calculation would be: $0.20 x 0.01 = 0.20. This means we've to open 0.20 lot size if we have a fixed stop loss of 50. In case it hits 50 pips stop loss level, we'll lose 0.20 x 50 = -$10 i.e. 2% of $500 equity.

                    If our stop loss level is at 30 pips then the calculation would be $10 divided by 30 = $0.33. This means we've to open a 0.33 lot size volumes in our trading. In case the position hits 30 pips stop loss level we'll lose only $0.33 x 30 = $9.99 i.e. almost 2% of $500 trading equity.

                    4) Set up risk-reward ratio: If we've already set how much we're willing to lose in every trade. Then we must try to set the reward ratio too. Most probably we've to fix the risk-reward ratio in a way that we can gain maximum and lose minimum from every single trade. So taking this into consideration we can fix the risk-reward ratio to 2:3 or 2:4. Even we can set it to 2:5 but it won't be good if we expect beyond a limited level.

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                    This is important to set a risk-reward ratio prior to opening any trading position. Here the risk percentage should be less than the reward percentage. If we lose 2% of our equity in one trade then we must try to gain 3% or 4% from our subsequent trade. However, we may face consecutive losses but our risk-reward ratio should be well maintained in any situation.

                    The best part of maintaining a risk-reward ratio is that we can able to grow our account size. Suppose we've lost 5 trades out of 10 trades. We'll lose $50 in 5 losing trades with 2% risk. On the other hand, we'll gain $20 x 5 = $100 from our winning trades. So the overall profit would be $100 - $50 = $50. This proves that good money management can help us to grow our account balance even we lose 50% of our trades.

                    5) Fix Maximum orders: If we've already fixed the maximum losing amount then we shouldn't go for too many orders at a time. Suppose we've fixed the losing amount to 2% for one order. In case we open two orders at a time then it'll become 4% risk at a time. So this type of order should be avoided.

                    If we really like to open more than one order at a time then the risk percentage should be divided among all trading positions. Suppose we want to open two orders at a time in two different currency pairs then we must risk 1% each. This way we'll only risk 2% of our equity in case both positions hit stop loss.

                    6) Use Standard Leverage: We often heard that high leverage is a double-edged sword. Higher the leverage level higher the chances of losing equity. So here we should try to fix the leverage to a standard level. This is true that we can gain more by trading with high lot size orders with the help of high leverage. But at the same time, we may lose a big amount with the same higher leverage.

                    If a trader is very new to the forex trading field. Then he or she must try to lower the leverage. 1:100 leverage is ideal for a new trader. However, for an experienced trader, it is easier to handle trades with a higher leverage level. If a trader strictly follows money management rules then lower leverage can also help him or her to gain massive profit from regular trades.

                    7) Maximum Drawdown: Most of the time we can see the traders win a good amount but at the cost of maximum drawdown. So here we've to be very careful not to leave our trades to go into deep losses. If we put stop loss and open only one order at a time then the maximum drawdown would be limited to risk percentage. If we risk 2% in one trade and put stop loss then the maximum drawdown will be limited to 2% only.

                    In case we open too many orders at a time. Suppose we've opened 10 orders at a time and we've put stop loss with 2% risk. Even it goes down 1% each then we'll get a 10% drawdown. And this should be avoided. We should split the risk among all orders as mentioned above. We shouldn't risk more than 2% combined together in case we've opened more than one trading order. For example, if we do not want a maximum drawdown of more than 2% then we must calculate it beforehand.

                    Suppose we've opened 10 orders then we must split the risk i.e. 2% among all trading orders. In such a situation, we should risk only 0.02% on each trade. Only then we'll able to control the maximum drawdown restricted to 2% or less.

                    Key points to be noted:
                    • Money management is a system where we can reduce risk and maximize profits.
                    • We should avoid high leverage in our trading because it can give us huge losses.
                    • Stop loss and take profit should be placed at an appropriate level if we're strictly following money management.
                    • We should open standard lot size orders depending on the account size and stop loss level.
                    • We should try to avoid opening too many orders at a time.


                    Advantages of money management in forex trading
                    • There are a lot of advantages to implementing money management into our forex trading. We can lose only a certain percentage of the amount from our trading equity. This will give enough scope to recover the losses.
                    • Money management allows us to trade without the fear of losing. We can take trading decisions at the correct time. There will be no hesitation to trade even before releasing any economic events.
                    • Money management won't guarantee success. But even we able to maintain average performance we can be a profitable trader. Even we lose 50% of our trades we can be a profitable trader. For example, if we lose 5 trades and win 5 trades, with a 1:2 risk-reward ratio. We'll easily be on the profitable side.
                    • Even experienced traders follow money management into their trades. So we can assume that money management is a proven system to become successful.
                    • This is very easy to follow money management because we won't need to change any strategy or analysis. Only we've to put stop loss, take profit, set lot size, leverage, and so on. So without any extra cost, we can implement money management in our trading system.
                    • Money management teaches us how to be disciplined in our trades. Also, it restricts us to go for high-risk trades. This is a good teacher for us and we can be a successful trader by following it to our trading system.
                    • Money management helps us to become a professional trader because we can protect our account from any heavy losses. And by following money management properly we can never go into deep losses even we do mistakes in our trades.
                    • We can easily get over from getting frequent margin calls if we follow money management properly.
                    • Many traders are afraid of adopting forex trading as a career option. Because they are not able to protect their account from getting heavy losses. But money management would help every trader to adopt it as a career option and encourage more people to join the profession.


                    Conclusion: We often witnessing the importance of proper money management. Because a lot of good traders face huge loss including a margin call. We can't suggest anything like changing the trading rules by anybody else. Because every trader has a different trading plan and strategy as well. They are good at their own trading strategies and in bringing good profit on a regular basis.

                    But the money management can be suggested or imposed on every single trader. There is no separate set of rules to implement differently the money management strategic tool to our trading system. It is a common tool for new and experienced traders to control the risk. So this can be easily adopted and implemented by every single trader, no matter what strategy they are using in their trades.

                    Most of the traders leave forex trading despite having good knowledge of it. Because they lose massive amounts on a regular basis, even they face margin calls on a regular basis. This is why they leave forex trading in the end. But they never realize the importance of money management. They don't like to put stop loss or take profit into their trading positions. And it becomes a habit for them to forget about it all the time.

                    Money management is a simple but effective strategic tool to prevent us from big losses. We might face stopping loss hits in a row. But if we continue to put stop loss and follow proper money management then we can become a profitable trader. This is how money management works for every successful trader. If we really want to be successful then we must follow proper money management.

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                    • #11 Collapse

                      Money management

                      My answer on this question can be found in the link below :
                      https://forum.mt5.com/showthread.php...1#post15002111
                      My Trading Journal

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                      • <a href="https://www.instaforex.org/ru/?x=ruforum">InstaForex</a>
                      • #12 Collapse

                        Money management in Forex trading

                        Money management is the risk control through protective Stops either hedging which balances profit and loss. Money management is necessary in Forex trading and any other trading or business venture and it is the most important thing in a trade. Most new traders focus on the entry and exit strategy and don't give much importance to money management.
                        As a trader you are supposed to have target profit and know your chances to be right or wrong as well as to control risk through Stop-loss orders. It is better to trade with the order in which you can lose 250 USD if you turn to be wrong and make a profit in the amount of 500 USD. Thus, understanding each of these and what they mean to your trades, can be the difference between surviving and profiting, or blowing your account.

                        I would prescribe that on the off chance that you wish to have the best Forex Services, you should look at the services offered by Instaforex. They offer the MT4 and Mobile trading currency platforms. Instaforex offers more than 107 money instruments, digital currencies including bitcoin, records, shares, securities, gold, silver, energies, items and more CFDs for your own venture and exchanging alternatives.


                        Money management: Tips for forex traders

                        - The same amount of investment to another currency can make you earn more money or visa versa.

                        - Spend time considerable time on strategizing in which currency pair or product you want to invest, study the fluctuations and the price movements.

                        - Manage your money between the investments you are planning to make.

                        - Your proper assessment of risk and management of your trading capital will help keep you in the forex market trading.

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