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Money Management will Either Make
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The Forex market lends itself to many styles of money management
Forex traders can choose to set tight stops and hope to profit from a few big trades, or they can take smaller profits more frequently, while relaxing their stops at the risk of larger losses. The first method has more frequent, but smaller amounts of "loss pain", while the second has more instances of joy, but at the expense of the odd "nasty" hit.I find the second method best suits my personal style, something that should be important to you too. As humans, we have a much easier time handling winning, then losing. This method lets me have more winning trades, though sometimes for smaller amounts. But a win is a win and that's why we're in this business!
Money management separates
the Pros from the amateurs
The situation mentioned on the Risk page about the Pros making money with the amateurs both losing, regardless of what side of a trade they took, boils down to one factor... money management. That is how critical it is to your success.Click on the links below for more details on the major components of the management of your trading account and how they each affect your bottom line:
Leverage
Stop Loss
Drawdown
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