How To Manage Your Money In Any Market To Make Profit

Many Forex traders are unsuccessful for one reason: they over-trade. If you are not having success trading, you must first determine whether you are over-trading before adjusting your trading strategy.

The 3 questions that follow will help you determine whether you are over-trading.

Are you using too many strategies?

Many unsuccessful traders use between 5-10 different strategies and, of course, they do not make any money. The main reason for that is that, the more strategies you use, the less you can focus on the market itself. I am not saying that you shouldn't know the market or master your strategy. Those are essential to become consistently profitable. However, this may be an impossible task if you are trying to master 3, 5, or 10 different strategies at the same time.

Are you risking too much on every trade?

Understanding the amount you risk is of more importance than knowing/setting the amount you are going to make. Money management is the most important step of your trading strategy. Many traders go from being unsuccessful to being extremely successful by simply implementing a sound money-management strategy.

What do you do when you are making money?

Greed is your worst enemy. It is human nature, we often get greedy when profits are running high. I've been there, done that, but, at the end, ended up losing it all. Greed leads many traders to reckless acting and committing mistakes.

After asking yourself these questions you probably know whether you are over-trading. Over-trading is really as harmful as using a strategy that has a low ROI (return on investment).

Now let's discuss how you can prevent yourself from over-trading.

Establish a trading plan: Before you enter a trade you should always know where you are going to exit. You should also have a set of rules to gradually take profits, where your stop loss will be if the trade goes against you, and, as you gradually take profits, where your trailing losses will be.

Your trading style should fit your personality: this is very important because your money management strategy should emulate your personality. Every trader has a different tolerance for risk and, while higher risk may lead to high rewards, it may also lead to bigger losses. As a scalper you will probably set small percentages for profit in each trade (0.5% to 2%) and, as a swing trader, a bigger percentage like 3% or 4% is the norm.

Your trading style and personality should be the driving force behind the Forex strategy you implement.









0 comments

  • Spending Habits of Retirees Revealed One of the most difficult parts in Income Planning for our pre-retiree and retiree clients is all of the requirements that need to be made to construct the plan. For example - how will spending change post-retirement from pre-retirement. One…
  • Cover Letter - Six Essential Components With Examples Every effective cover letter for resume should have the following components Heading and salutation The cover letter for resume and resume properly should have a matching look as though coming from the same family. Include your contact…
  • Top 3 Strategies For Selling Services Selling services is quite different from selling products, even though some marketers may disagree with me. Therefore, it is important to develop a strong and unique service selling strategy. Top 3 Strategies for Selling Services: # 1…
  • Online GamblingInternet Casinos Inc. (ICI), the world's first online casino, started operating from August 18, 1995, with 18 different games. Since then more than 1,400 websites, mostly domiciled in small Caribbean islands, have given rise to an industry that…
  • Teacher Appreciation Gifts - Never a Bad Time When I was growing up I wanted to be a teacher. I used to sit my dolls at their little desks and I teach them a lesson on my easel chalkboard and everyone always had homework. I loved grading the papers! I had no idea what a hard job teaching…