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  1. #1
    forclo is offline Junior Member
    Join Date
    Oct 2007
    Posts
    3

    Default A Mucth Better Introduction to Money Management

    Money management strategy

    Your risk per a trade should never exceed 3% per trade. It's better to adjust your risk to 1% or 2%
    We prefer a risk of 1% but if you are confident in your trading system then you can lever your risk up to 3%

    1% risk of a $100,000 account = $1,000

    You should adjust your stop loss so that you never lose more than $1,000 per a single trade.

    If you are a short term trader and you place your stop loss 50 pips below/above your entry point .
    50 pips = $1,000
    1 pips = $20

    The size of your trade should be adjusted so that you risk $20/pip. With 20:1 leverage,your trade size will be $200,000

    If the trade is stopped, you will lose $1,000 which is 1% of your balance.

    This trade will require $10,000 = 10% of your balance.

    If you are a long term trader and you place your stop loss 200 pips below/above your entry point.
    200 pips = $1,000
    1 pip = $5

    The size of your trade should be adjusted so that you risk $5/pip. With 20:1 leverage, your trade size will be $50,000

    If the trade is stopped, you will lose $1,000 which is 1% of your balance.

    This trade will require $2,500 = 2.5% of your balance.

    This is just an example. Your trading balance and leverage provided by your broker may differ from this formula. The most important is to stick to the 1% risk rule. Never risk too much in one trade. It's a fatal mistake when a trader lose 2 or 3 trades in a row, then he will be confident that his next trade will be winning and he may add more money to this trade. This is how you can blow up your account in a short time! A disciplined trader should never let his emotions and greed control his decisions.
    [URL="http://www.forexclown.com"]www.forexclown.com[/URL]

  2. #2
    badthriller is offline Junior Member
    Join Date
    Oct 2007
    Posts
    5

    Default Wrong Money Management

    hi guys, I have to write in this because of your 'incorrect' money management ideas. If you go on with that idea you will never make good profit in the long run, you will just be a gambler. I am saying this after reading the article in http://www.thecode.co.nr
    It gives clear idea on how hedge fund managers manage their fund and believe me it is far away better from our ways!

  3. #3
    forclo is offline Junior Member
    Join Date
    Oct 2007
    Posts
    3

    Default looks like another commodity scam system

    buying commodity systems generally do not work. the only way to profit in Forex is to learn to trade your own system. borrow ideas from others and modify to fit your style.
    [URL="http://www.forexclown.com"]www.forexclown.com[/URL]

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