Without good quality strategy, Money and risk management is USELESS - Page 2
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Thread: Without good quality strategy, Money and risk management is USELESS

  1. #1
    Trader Lyon's Avatar
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    Without good quality strategy, Money and risk management is USELESS

    In forex trading we are been taught of money management, of course!, we need to have good money management so that we don't loss all our money in the market.

    Money management is the rightfully investing of the amount of money you can afford losing. Which means, if you have $10,000 to your name, meaning that is all the money you have, you should be wise enough not to invest all, that means, invest 10- 40 percent of it, which is $2000-$4000. You still have some money left. That way, you don't loss your shirt.

    Risk management is risking the right amount of money on each trades. Some will argue that you don't take more than 2 percent risk per trade. That means if you have $1000 capital balance, if you are to buy EURUSD, your stoploss should not exceed a total dollar value of $20 which is 2% of $1000.

    So when you loss even 5 trades on a role, you only lost 100 because $20x5=$100. So you loss less right?

    But all those above illustration on money and risk management are all useless when you don't have a strong quality trading concept/strategy and discipline.

    Therefore my message is that, we need to pay more attention to mastering and learning a good trading strategy and discipline because then we can reduce the losing trades we will take and that will help our money and risk management protect our account.

    Because when your strategy is wack and you lack discipline, you will only loss slowly but surely you will loss all funds.

    Hope this helps change the way we trade.

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  2. #11
    Trader simpleman's Avatar
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    Many a times traders in this forum made mention of the important aspect of the trading which is money management, but following this without combining it with the other aspects of trading such as discipline , knowledge using of stop loss etc, it may not be so effective and work for traders.

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  3. #12
    Trader layigold's Avatar
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    With good risk and money management on the part of a trader , bad trading system will not be easily noticed to be bad and such a trader may even stay longer in trading business than a trader who has access to the best trading system without good risk and money management . I do not consider a trading strategy to be of good quality if it lacks good risk and money management rule and this is to tell every trader that the knowledge of a good risk management is not optional in trading but rather a matter of necessity. The unfortunate thing today is that the aspect of risk management is often neglected by so many forex traders and that is the reason why majority of retail traders hardly stay long in this trading business

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  4. #13
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    you have highlighted the importance of money management and how we can effectively use it in the forex market in such a way that we will not lose too much of our trading capital into the market, i agree with you on that .Having a good trading strategy is also very crucial because if you are a good money and risk manager, and you do not have a good trading system, most time you will always ended up losing trades because the approach you are using to trade the market is wrong, so we must be able to combine the two for our profitability as traders, depending on just one out of the two will not give us maximum results as we may desire in the market.

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  5. #14
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    as traders , there are several thing should be learned and mastered with well and we can not go to better levels when we have not yet mastered one of them or miss them, and i see that there are three elements should be known and mastered with well, we need enough skill , good money managements and stable psychologies, or that is about mental and emotion controlling, and so we see that, when we have not yet complete them and hard to achieve the goals, so all of them are the keys for us if want to get right track in this business

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  6. #15
    Trader kagho's Avatar
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    all the factors must be there for us to make profits in the market so a good quality strategy and Money and risk management must all be there.as good quality strategy help us to make profits consistently in our trading and good money and risk management plan help to keep our account safe from huge losses in case of a loss

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  7. #16
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    Quote Originally Posted by layigold View Post
    With good risk and money management on the part of a trader , bad trading system will not be easily noticed to be bad and such a trader may even stay longer in trading business than a trader who has access to the best trading system without good risk and money management . I do not consider a trading strategy to be of good quality if it lacks good risk and money management rule and this is to tell every trader that the knowledge of a good risk management is not optional in trading but rather a matter of necessity. The unfortunate thing today is that the aspect of risk management is often neglected by so many forex traders and that is the reason why majority of retail traders hardly stay long in this trading business
    I think we are thinking more of making money, so it will be best if a trader get to learn and have a good trading strategy which works for them and makes them money. As a forex trader who wants to make money from the business, they need to learn and have a good strategy thus well learned and understood before they can have a risk management work for them.

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  8. #17
    Trader Sixteen's Avatar
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    Quote Originally Posted by layigold View Post
    With good risk and money management on the part of a trader , bad trading system will not be easily noticed to be bad and such a trader may even stay longer in trading business than a trader who has access to the best trading system without good risk and money management . I do not consider a trading strategy to be of good quality if it lacks good risk and money management rule and this is to tell every trader that the knowledge of a good risk management is not optional in trading but rather a matter of necessity. The unfortunate thing today is that the aspect of risk management is often neglected by so many forex traders and that is the reason why majority of retail traders hardly stay long in this trading business
    Your point is as good as mine because I have never seen a perfect system. Every system have their own flaws and sometimes you could see a profitable system doing very bad in the market. When this occurs, some traders will run to another strategy thinking that the first is no longer effective. Good management is important and this is what help us come up with profits even with more number of loss.

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  9. #18
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    Yes, without good quality strategy we do not earn well because good quality strategy and money management is most important for trading business. money management is most important for this business. Those traders who have strong knowledge about the money management earn good money.

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  10. #19
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    both are connected to each other, because without a proper management a strategy is also useless, no matter how much good is our analysis but if we have bad management then simply we can not earn here because with bad management we can become more greedy and can lose here, so trust on your self and make orders which is normal not too much big or small

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  11. #20
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    Without money and risk management we can't succeed trading in the forex market that is why we shouldn't waste our time to trade in the forex market without a good money and risk management because we can't make money in the market without a good money and risk management in the market, we should start trade in the live account only when we have learn a good risk and money management.

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