Forex Money Management
Learn to control risks in trade 📊 Forex smart money management
Forex Money Management = Trade safe building stable gains
Money management is the way Forex traders control their money flow: literally "IN or OUT of their pockets..."
Money management is simply the knowledge and skills on managing own Forex account.
Forex brokers will rarely educate traders on good money management skills, though almost all brokers will offer some sort of basic tutorials, therefore it's important to also learn on your own.
There are several rules of good money management:
1. Risk only small percentage of a total account
Why is it so important?
One should clearly understand that good traders are, first of all, skillful survivors. Those who also have deep pockets can additionally sustain larger losses and continue trading under unfavorable conditions, because they are financially able to. For an ordinary trader, the skills of surviving become a vital "must know" requirement to keep own Forex trading accounts "alive" and be able to make profits on top.
Let's take a look at the example that shows a difference between risking a small percentage of capital and risking a larger one. In the worst case scenario with ten losing trades in a row the trading account will suffer this much:
As you can see — the money management approach vs unguided trading — can have serious consequences for unsuspecting traders.
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