Money management in a nutshell. Part 1 - Page 94
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Thread: Money management in a nutshell. Part 1

  1. #931
    Quote Originally Posted by erespe View Post
    With martingale technique, we double the possibility for profit but also double the possibility of losing money. Make sure that before choosing this strategy, we must already really understand the workings and risks. Of course we can not ignore the power of margin that we have when using this strategy, so when our margin is minimal, you should never use this strategy.
    Yes with the martingale both profit scopes and loss scopes are increased and hence even these decisions should be taken in accordance to our risk management rules. I think good and cautious trading is achieved only when both risk management and analysis is combined. Risk management is the heart of successful trading. If trader wants to be skilled, then that trader has to practice and focus on good work always.

  2. #932
    Quote Originally Posted by AmitChallenger View Post
    Yes with the martingale both profit scopes and loss scopes are increased and hence even these decisions should be taken in accordance to our risk management rules. I think good and cautious trading is achieved only when both risk management and analysis is combined. Risk management is the heart of successful trading. If trader wants to be skilled, then that trader has to practice and focus on good work always.
    You have mentioned it rightly, every trader has to trade in Forex giving due importance to risk and money management. When these are followed with discipline, we can create a calm and stress free environment for ourselves so that we can take the best possible decisions. In most cases stop outs only point towards the traders inability to manage their risk properly.

  3. #933
    Trader ara's Avatar
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    Quote Originally Posted by Abhishekwala View Post
    You have mentioned it rightly, every trader has to trade in Forex giving due importance to risk and money management. When these are followed with discipline, we can create a calm and stress free environment for ourselves so that we can take the best possible decisions. In most cases stop outs only point towards the traders inability to manage their risk properly.
    As I have experienced, the main problem of traders who are lack of risk management is because they don't did a good plan, we need a test (back test or forward test) in order to know our risk , reward, and the quality of our trading strategy. After we know it, then we've got the data in hand, this will automatically make our psychology better or reduce the pressure psychologically.

  4. #934
    Quote Originally Posted by Abhishekwala View Post
    You have mentioned it rightly, every trader has to trade in Forex giving due importance to risk and money management. When these are followed with discipline, we can create a calm and stress free environment for ourselves so that we can take the best possible decisions. In most cases stop outs only point towards the traders inability to manage their risk properly.
    You are very right , I'm sure traders who are able to apply Money management wisely already know the risk control on every transaction done, but what traders need to know is how to keep consistency in implementing them in order not to trade with lots size that do not count wisely until eventually the traders even go into losses.

    Therefore do not ever feel greedy to want to get profit as much as possible in a very short time because it is part of the risk taking is too high which ignore the implementation of good money management
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  5. #935
    Martingale is not the best strategy in money management for me. This could been risky so much in trading. Except the amount enough big to defense in market, but my experience about martingale without full calculating and less the discipline to plan trading, this is very risky.
    Trade with your eyes and not trading with what you wish impossible

  6. #936
    Sometimes, traders may perceive forex trading as gambling since trading can be associated with many uncertainties and riskiness. But to be a survivor each trader must try to secure his trading performance because forex being a financial market is full of perils here. However, yes, when a trader can’t make certain competent money organization and risks organization to prevaricate riskiness and protect his wealth position in efficient manner then trading can resemble to gambling here.

  7. #937
    Money management is very important in forex trading, trader needs to know how to manage capital yo trade.Capital of a trader should determine the lots size trader should use for trading,trader with low capital should not use big lot size for trading.Trader with small capital that use big lot size for trading,such trader will burst the capital when loss oocur.If you are trader with small capital,use small lot size for trading,and such trader should make sure he or she do proper analysis of market before placing order.Also trader with big capital should also do proper analysis of the market before placing order and it is better for such trader to trade with small lot size and can trade different currency.If such trader trade five different currency,if he or she win three or four trade out of five trade,it is still good.

  8. #938
    Money management is a critical topic when it comes to forex trading. You have to make sure what size and lot you want to use, and while trading, you have to be careful not to wipe out your account. A good suggestion is to try it out in demo and see how you can manage the money in the same way how you will achieve them in real account. That could help you out in the long run.

  9. #939
    Great thread. I agree managing money is crucial for any trader and his success.

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