 Money Management – The Key to Success in Online Forex Trading
Money management is 80 percent of any investment plan and the most important aspect in trading the Forex market, the remaining percentage is used for implementing a solid trading system, method or strategy.
For a proper money management you will need to include these 5 principles:
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Proper money management controls the amount of money you will invest each time, based solely on the account equity curve (your profit/loss overtime).
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Proper money management considers both risk and reward factors. Know your risk potential at any time; don't "close one eye". It's easy to think only about what would be your profits.
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Proper money management takes into consideration the value of the entire account; your capital is the most important! You can't invest with $0. Don't let few minor losses destroy your entire capital and force you to make hundreds percentage in profit just to retrieve your principal.
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Proper money management discounts all factors that cannot be mathematically proven or formulate. Your thoughts and emotions can't be implemented in proper money management plan/formula.
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Proper money management formula should give you one outcome for an each set of variables, without any guesswork.
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