Forex money management strategy

Forex money management strategy
Risk management - a system of Forex money management strategy. As well as financial relations arising in the process of governance. Risk management in FX are usually called money management. From English Forex money management strategy (wealth management). Smart money management strategy allows you to make a profit on the basis of trade, even if the minimum number of profitable trades in forex.

By law, meanness newcomers often manage to buy at peaks and sell at the lows. Then, in the course are such standard errors as "castles", Forex money management strategy losses averaging martingale. All are fast and ultra-fast way to merge your deposit. Using money management in trading - it's the worst case possibility is very slow to lose their money. Because if you can not trade, then the result will still be negative.
But under certain money management knowledge and experience allows us to "survive" a series of failed trades, and then still get in profit. And without unnecessary emotions, nervous breakdowns and depression. In other words, can apply to Forex money management strategy trading as a job rather than an exciting game.



Opening a position, you are guided by the basic rule: the loss of a single transaction should not exceed 2-5% of the deposit.
This rule is governed by stop loss. Smaller than the lot you are selling, the more stop-loss can be set.
It is advisable to put feet under / over the strong levels. With this flat can significantly increase your deposit. And the unexpected breakout - exit with minimal losses.

If Forex money management strategy should be guided by another rule: the total amount of investment should not exceed 30-50% of the total capital.
Given that the risk of losing money on forex is high enough, you have to sell only the amount you are willing to lose. If your trading experience is too small, the bulk of these funds is better to invest in less risky assets, and forex deposits with much smaller amounts.

When a series of losing trades (10-15% of the deposit) must make a break for more in-depth market analysis.
It is not necessary in the wake of market plunge again in the hope of a quick return everything. Likely to occur in macroeconomics, some events that you have not taken into account in their trading. Or perhaps, prevail in the market panic that should wait.
If you came to the Forex money management strategy market for a long time and think of the trade seriously, the rush is inappropriate. During the year, you can get a lot of unambiguous signal to buy or sell currency. One of these inputs can be so successful that the deal will grow into medium-and not only cover all the previous losses, but also takes you into profit.

Conclusion. In the six years of detailed market analysis and real trading, I found an interesting rule: respect for money management can make a profit virtually any Forex money management strategy trading strategy.
It's just plain mathematics. The decision to open a position you take on the basis of several strong signals. This means that the chance for a good deal is 70-80%. If your deposit will last for 15-20 transactions, on the theory of probability you are still ultimately remain in profit.
So, good luck and a little more confidence in yourself!


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