Money management rules

Pros exchange trading argue that the success of the financial markets depends primarily on the reasonable control its own capital (money management).

Capital management — is the first thing you must learn the trader!

The basic rules of money management

1. In transactions in the market, do not increase the volume more than 10 times!
Many novice traders believe that you should start with small amounts of money in the account. Their position is simple: «I do not want to risk large sums.» And they are absolutely right! RISK needed in small amounts, especially in the beginning of its commercial activities, but that is what is required on account with larger amounts.

The principle is simple — the early stages of a trader should endeavor to use the minimum of the sum in the account to trade. If your account has a $ 1,000, the recommended transaction volume of 10,000 This way, you are using a 10-fold increase instead of the maximum available 100 times. It is important to understand that the larger the transaction you want to make, the greater the amount of accounts should you be.

For example, you want to get started in FOREX with the volume of transactions of 30,000 dollars. For competent money management you need to have in the account an amount not less than 3000 dollars.

2. Always expose the Stop Loss and Take Profit
These warrants have as their primary goal to save a trader from ruin (execution of stop-loss) or provide additional income (stop-profit). Psychological factor — this is the second, what should not neglect the trader. So be sure to place orders immediately after the opening of the transaction.

3. Do not recoup
Financial markets — is not a casino. Think sensibly and prudently — if you are not confident in their abilities, or have not thought their next steps, do not risk capital.

The basic principle, which we recommend to follow — a weighted trade with risk diversification and maximum concentration on transactions in profitability which you believe.


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