I think that some people who are doing Forex have lost all the funds with one shot. It’s just gambling. People who have been eating for 10 or 20 years are doing good money management. In fact, those who are winning place more importance on not losing much than on winning. This is because we know that if we don’t lose, we will eventually accumulate profits. Being blinded by profits and investing all your money is no longer a gambling. This article explains what kind of money management is good.
It’s more important not to lose than to win
As you can see after many years of trading, most entries come back , end in a draw, rather than making a blast. This is because the market has the property of returning when it moves. Trends don’t come out every hour of every day. The bigger you try to win, the higher the draw rate will be. Then, what is happening to those who can win? They are constantly trying out until they catch the trend. Trial hitting is to enter at the point where you think you can win. Most entries end in a loss cut or a draw, but one in ten and one in 20 is in the big tide. Therefore, it is important to be conscious of how to keep up with it.
Money Management Tips 1: Don’t Do Averaging down
Anyone who is very confident in their skills is fine, but if an unfamiliar person do averaging down, it will be painful, all the funds will melt. Be sure to do it in one position. We also do not recommend simultaneous entry in multiple currencies. Sometimes I can’t concentrate and it’s for advanced users. You should focus on one currency pair, the chart at first. It is quite possible that all the funds will disappear with just one trend by picking up. Then you will have the same ending as an automated trading tool.
Money management tips 2: Loss Cut
One of the characteristics of a person who spends all his money is that he cannot cut the loss. Although the market has the property of returning if it moves, it is difficult to return it when a big trend appears. Let’s decide the loss cut point before entering. Now, the FX trading tool has an automatic loss cut function. Loss cuts are painful. So it is a fact that some people cannot cut it. However, if there is a loss of implications, it will continue to make you feel uncomfortable. Needless to say, it is difficult to keep winning in such a situation.
Money management tips 3: Stop-loss is 1-2% of total funds
The recommended amount of loss cut is 1-2% of the total funds. If it’s 1 million, cut it if you lose 10,000 or 20,000. Having more than that is mentally dangerous. When your mind becomes unstable, you start messing up trades and gambling. Mental stability is paramount to keep winning in the trade. If the loss cut is 1% of the total funds, it will not be 0 unless you lose 100 times in a row. The most important thing in trading is not to make a profit. To survive. If you don’t survive, you can’t come back. It’s a money management method to keep you alive.