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

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    Registered user 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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    Registered user sniper007's Avatar
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    But the most important factor is still that the money and risk management is important in forex trading still. I get your point. But it will not be a good thing not to use risk and money management which will make you wipe your trading account in seconds, but with good money and risk management, in a nutshell you loss less but have lasting capital to correct your mistakes.

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  3. #3
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    the trader always needs a good strategy and use the risk and money management at the same time, the trader needs to have good trading strategy that let him to choose the proper trading positions and so this will make trading more effective and more profitable, the trader should always follow the plan that help him to trade well with good risk.

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    Registered user maryrosi's Avatar
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    yes, the most important forex trading is money management and also risk management, regardless of its forex trading strategy, we can not make market moves for the future, so we should always use money management and risk management. its goal to minimize the risk of loss, we all know if tradimng forex must have risk of loss.

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  5. #5
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    mater,i agree with this, if we miss one of them and all is nothing, we can not work trading only with risk managements without enough knowledge and skill, or also, we can not implement the trading strategy with well if ignore money managements too, and so we see that we need both of them to work together then we can reach the goals, but still not enough , we have to support all of them with good psychologies, so we see that all of them as one package which should be mastered well by traders

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    Registered user Sixteen's Avatar
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    I know of a trader who would say that you don't actually need a profitable system before you can be successful because your success depends on how good you are been able to manage your risk in forex. Facts have been proven that risk management is a golden key in forex because if you are a good risk manager you could have more losing trades than winning trades but end up becoming profitable. So I do not agree risk management is useless instead its what help our strategy to be effective.

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  7. #7
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    i agree with you dear but also if even you don't have a good strategie but you know how to manage your money you will get profit if you choose good entry ponits like weekly and monthly supports and this is not hard to found those levels and your capital should be good to get convincing profit and do not trade in just one pair you should distribute your money in other pairs.

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  8. #8
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    It because if we have not good strategy and not mange our risk and not have any plans in the trading then we almost trader like the gambler trader do and that's why the mostly time we have the big loss in the trading so it is very necessary that we have the good strategy in the market , have good planing and evaluate our trading strategy and plans well in the trading.

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    Registered user Obaforex's Avatar
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    Yes you are very correct without a good trading strategy you can not be successful in the forex market even if you practice a good money management, the only difference will be in how fast you will loss your entire trading capital but sooner or later you will end up losing everything. Although practicing a good money management will help your limit your risk exposure in the forex market but you must have a good trading strategy for trading to actually make profit.

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    Registered user famousfx's Avatar
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    In all , everything in life need balancing, it is true that we can not only follow money management without , good strategy, discipline and following the rules involve in trading, all may be amounted to nothing, therefore trader must plan. use good strategy, and be patience in trading.

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