Wednesday June 1, 2011 19:15
Proper Trading Money Management
Posted by Pro Trader as Intro to Forex
Of course, it is amazing statistic that one hundred of those foreign currency traders who actually blow up their trading account really do not understand how exactly to apply good and proper trading money management. However, the sad thing is that many of such traders certainly proceed building up another trading mistake, they come back into the modern forex market do it again and again. Thus they definitely never learn the main basics of essential money management in forex which would clearly save them from blowing up their trading account again and also provide them with that trading income for which they are searching for.
Besides, as it actually stands, only by reading our article you are obviously far and ahead of some average foreign currency trader, because you are on exact track in learning the important trading money managements fundamentals. So due to this article, you are going to find out how particularly to control your own risk, for example such as Forex Market Wizard and also achieve that trading income which you deserve.
Thus let’s talk about those basics and fundamentals. In fact, the main principle of money management in forex trading is quite simple and easy: it is necessary for you to protect your capital. For sure, many professional and expert foreign currency traders definitely limit their actual risk per trade to between only two or four per cent of their trading capital, because it is just the best risk per trade for optimal long term capital growth.
Besides, risking that percentage of your trading capital obviously guarantees that you are never going to blow up your trading account, whilst also guaranteeing that you really get only the highest possible capital growth. Without any doubt, it is the sweet spot for risk in forex trading that has certainly proven many times by that research which is done by only the top minds of risk management and foreign currency trading.
Well, maybe you already know about this two per cent per trade rule in trading money management. Moreover, you are already applying this into your daily trading. And so as a wise and clever forex trader, it is necessary for you to recognize that there will come that time when your lucrative and reliable foreign currency trading system will not work any longer.
In addition, each Forex Market Wizard is aware that no matter how good and profitable trading system is, there is some certain probability of sudden and unexpected failure. And that’s why they have one more important step to control their actual risk. And finally, if you really want to emulate actual trading performance of such Forex Market Wizard, it is necessary for you to learn the essential secret of the failsafe point.
Surely not a single piece of knowledge can be a 100% guarantee against losses, especially on Forex market, but sometimes just one Forex books can be of big service to you.