Let me make sure you understand thatâ¦if you cannot sleep, go to dinner with your spouse, go golfing, or spend 6-8 hours doing whatever without thinking about your open trades, youâe risking too freaking much money! You MUST Trade down to the sleeping level. After four consecutive losses, reduce risk to . After 1 loss, reduce risk to 2% of base capital. He moves the stop loss back by another 100 pips this time.â If you find yourself worrying about a trade, youâre risking too much. I view trading rules much like I approached combat in the Army. Some of them are good and some of them are crap. If youâre tired of hearing it and still losing money, you might want to take a serious look into your goals. All that he has left is the money that he had leveraged. Of course they will pay top dollar for profitable systems and signals. This is a money management article. Even worse is the poor guy who has to âget backâ at GBPJPY for the 300 pip loss he took in the previous trading session.00 for it? How about signals? If you knew that a signal provider would make you $2,000. His mistake was what welded double J hook woven lashing belt metal hook I callacirc;trading beyond the sleeping level. I know the guy that this exact scenario happened to. Another 20 pips should do it. After 3 consecutive winners, increase your risk to 2. Price turns against him by 20 pips. All of them will make pips when the market is in tune with their signals. He fools himself into thinking that he made the right trade. Iâve actually asked these questions in my trading room. We make a living speculating on psychology, supply and demand. I have proven this dozens of times in the past and will prove it again on my website in a video. He canât lose. The market is just acting wrong. The idea behind money management is to not offer her much (even less when weâre losing) and take more from her when sheâs generous. Itâll turn around for sure. When I open a trade, I follow my money management steps.He goes to bed knowing his position is safe.When a non-professional trader is on a winning streak, he tends to attribute it to his trading genius. Between 1 June and 1 September, and between 15 November and 15 January, I risk no more than 1%.If the same trader had used sound money management and risked 3%, he&acircd have hit that 20 pip stop loss and easily swallowed the $400 or so loss. We think we have a $10,000.My method isnât the ONLY way to manage your forex trading.00 per month, would you pay $1,500. I just told you the secret of the mental game though. I say that they make pips because they don necessarily make profit. He&acirc now about to lose $2,000. 3.5% of your base capital. Money management is no different from everything else in the trading profession. The next Jesse Livermore gets five winning trades and is now a guruâ This is the point where he makes a fatal mistake. It works for me. Iâe modified them a bit from earlier versions so take a look even if you have already read my money management system: 1.5% of your base capital. Weâre traders, not investors. He takes his $13,000. A trader canât get back at the market. Donât laugh. There will be future articles on the mental game of trading. In fact, I use a different money management system on my income account than I do with my growth account.There are probably more than 100,000 different Forex systems available for purchase on the Internet. Perhaps a Wal-Mart greeter?Would you pay for a forex money management system? Ummmmâ¦probably not.00 in five short minutes, so he moves his stop loss. Reduce your equity by the amount of the financial risk for any open trades. Why not? He is a Rock Star trader nowâbrvbar;a real veteran. He can almost smell the leather in the new Porsche heâll buy with the winnings from this massive trade. An hour later, price is almost to his new stop loss.5% of base capital. Even the best system has long periods of drawdown. He sees that his trade is closed outâbrvbar;his new balance is $5,000. He can stand the thought of losing $1,000.00. so routine that it requires absolutely NO THOUGHT! No deliberation, no self-negotiation.00 per month for the service? Of course you would. Exceptions get you killed! Excuse yourself one time from following your rules and your blood will be sprayed all over the room. It is a market.00 for signals that produce $2,000. Heâw these rules? Just in case you didn&acirc get this earlier, say it again here: There are no exceptions to money management rules. He sees that heâs gotten a margin call. When I get in the car, I put the key in before I drive away. When it comes to money management and the mental-game of trading, they answer negatively. Proper money management will protect you from yourself. He wakes up and rushes to his computer. There are no exceptions to trading rules. Clients almost always answer the questions the same way. He places a trade&acira big trade. We always try to sling a big line, no matter what our current financial condition is. Trading this way will help you profit, relax, and sleep like a baby even with open positions smart enough to add and subtract.People are superstitious.00 account even after a 30% drawdown. It&acirc certainly not the most profitable. It&acirca series of steps that are taken every single time you trade. that routine. Positive pips counts do not equal positive equity. Pips and profit do not have a strong positive correlation. When I wake up in the morning I put on my pants before I step out the door.00 and puts on 5 standard lots. never move another 100 pips against him. Remember that every trader in the market wants you to lose. If you wouldnâ pay $1,500. After two consecutive wins, we reset back to 1% risk per capital and move back to step one. When you begin trading, risk only 1% of your base capital.If a Forex trading system promised to (and you KNEW it would) consistently make you money, would you pay $1,500. Even if you choose to trade a set percentage, which is absolutley valid, be consistent in your money management. There are reasons for this that Iâl get into later. Your success as a trader depends on this. Here are my money management rules. 4. The market is bigger than all of us, and shetake what ever we offer her, whenever she wants. After two consecutive losses, reduce risk to 1. After all, the 15 Minute trend IS Bullish and the 5 Minute stochastic is already almost over-sold, and the MACD is clearly in an up-trend. The market will turn around. If you break your money management rules, Iâm going to be spending ALL of your money instead of a little bit of it
