Without proper money management you will end up as a statistic. In other words one of those 90 % + of traders who loose their money. Money management tells you how much of your account balance to risk per trade. The whole point of money management is to ensure your survival over the long term, and to preserve your capital.
The most common form of money management is the percent risk model which tells you not to risk more than x percent of your account balance on any one trade. A range between 1 - 3 % is generally an accepted amount which has been a reliable percentage to use in order to make money in the long term.
0 comments:
Post a Comment