FOREX MONEY MANAGEMENT
Money Mismanagement is the number one reason for traders failing in the forex market.
This may very well be the most important lesson in all of forex trading. Before entering any trade make certain that you know exactly how much you may lose if you make the wrong call.
Understand the value of a pip and how to calculate how much each one is worth.
If you have to lose be certain that you do not risk more than 5% of your portfolio in any single trade.
The most difficult thing to learn in forex trading is not how to make money, that part is easy, it is how keep the money you made.
Don’t get overconfident and cocky after making a few good trades; always remember to gradually build up your portfolio.
Forex is highly leveraged allowing you to make incredible profits, but also huge losses if you are not careful.
Learn your own money management, if you are losing too often take a break and try to analyse where you are going wrong.
Remember if you start with $1000 and put everything down every time and make 100% ten times in a row and you will have $512000 and if you are finally wrong just once you will have nothing.
It is easy to fall into the trap of greed; we’ve all done it and have the scars prove it.