We have something really serious to talk about today. Of course about money again, but… This time not about spending and so on, but about saving. Have you ever heard about Forex money management or money management at all? Forex money management rules? If no, then sit down and read this. Carefully. Think on this topic, never stop thinking till you understand every word. This is important.
Trading Without Money Management is Nothing Else the Gambling
Without Forex money management, Forex traders are just ordinary gamblers, who are lucky from time to time. This has nothing in common with real trading. So, if you want to get money, not to give them away without a thought – Forex money management is for you. Really… This thing works, thanks God, because without these rules we would be in deep trouble.
I think everyone of us has ever thought and dreamt about going to casino and getting the greater jackpot ever. And all the attributes – champagne, glitter, flashing lights… But I do not think everyone accepts that the main thing that is ruling us in this desire is passion. Passion for the game, for the gamble. Well, Forex is not like playing roulette. For those who want to live and to get money from their business, not to play, there’s a thing called Forex money management. I strongly recommend you to get your brain working now and think about casino. No, stop thinking about champagne! Under those decorations we often do not see the faces of those who are in fact investing their money to this beautiful picture we see. Those, who lose. Those, who give their money to winners, casino and so on… Gamblers. The ones who have naked passion and nothing else. Well, is it quite scary for you huh? If yes – you’re on the right way to learn Forex money management rules to never become one of those unlucky persons.
Basic Rules
What you need to know first of Forex money management is that no matter how lucky you are, someday you will lose. And it’s only you who decides HOW MUCH will you lose and will you be able to start over again or not. The main of Forex money management rules is to always count and manage possible risks and to keep them in mind. Well, it’s quite clear – you risk a little, you lose a little. Don’t let this fact scare you, like, who doesn’t risk – doesn’t get. I will tell you that this is the truth, yes. You should risk and the percent of gambling should always exist, but let’s just decrease it to… Let me say… 2%? Decreasing your risk to 2% according to Forex money management, you can really decrease your losses even, in the worst case. I think it’s more than clear – when you risk a little, you can’t lose a lot, because losses can’t come from nothing.
Well, let’s go on with Forex money management! Second of Forex money management rules is obvious too (you can see, my lesson today is easy). Your capital is your fortress. When you lose the part of the fortress, it’s much harder to rebuild this. You lose money to rebuild your capital, and you lose time that could be spent on gaining new profit. So, your losses not only counting in money – but in time too, and time is very precious. You can get back your money (not gaining when doing this) but NEVER your time. Keep this in mind – it’s very important for Forex money management.
Third of Forex money management rules is on the way to come to you! Are you ready? Well, this one of Forex money management rules is for you: calculate. I know you are friendly with economics, so this is the main thing you are doing all the time, but never stop calculating your risk ratio! You don’t wanna lose, yes? So be sure that the chances to win are two or more times bigger than chances to lose. In Forex money management it’s very important to keep your money safe before you are sure that you CAN win and that you WILL win. No gambling please! Cold mind is needful.
Well, if you’re going to follow all the Forex money management rules that were written above, I’m sure you will success. If I could put them together into one sentence, it would be “Think before you do”. It works not for Forex money management only by the way… But that’s the other story already. Don’t be the one who pays for someone’s champagne in casino. Let it be you who is bathed in champagne all the time. Be clever. Trade smart. Use Forex money management rules and… Good luck!
