Money Management is a major problem for new traders. It is an important factor that separates a professional trader from an amateur.
However, in Forex trading, it the process of assessing the level of exposure to risk and it also helps to quantify risk. It helps traders to control how they apportion money for each trade, understand leverage and avoid the feeling of greed.
Moreover, opening the right trade at the right time is as important as closing a bad trade well on time. Reducing your trading size after a series of bad trades or taking a break until you can identify a profitable trade is always very helpful.
Finally, traders can avoid trading aggressively (over-trading) and learn to open small trade positions for volatile currency pairs.
2 Replies to “Money Management in Forex Trading”
Very helpful, thank you for keeping us updated relating
to your trading success.