Money Management - application features.

A term such as “Money Management” is often perceived as something complex and related to large sums of money.

Money Management - capital management, measures to protect existing funds and ways to increase its amount.

In fact, all money management in Forex can be reduced to a few small points:

• The deposit amount with a broker is only 50% of all funds you have, the second 50% is better to keep in a bank account or invest (the percentage is higher). You should not risk your entire capital in any case, even if the amount of funds does not exceed several hundred dollars.

• The total volume of transactions should not exceed your deposit by more than 10 times, of course, there are strategies that involve riskier Forex strategies, but now we are talking about using Money Management.

• The amount of losses is no more than 5% from one transaction; if you see that the market does not allow you to set such a stop loss size, it is better to postpone the transaction until a more opportune moment or reduce its volume in relation to your deposit.

• Diversification in Forex - in our case, this means opening several transactions on different currency pairs, while trying to select pairs moving in different directions.

It is better if these are tools that are not directly dependent. • Hedging is a rather controversial technique that is widely used to reduce risk; when it is used, two positions are simultaneously opened for the same currency pair, but in different directions.

Setting a stop loss allows you to close the losing one of two trades after a certain time. • Stop orders - take profit and stop loss are a prerequisite when opening any of the transactions, and the installation of pending orders is no exception. Moreover, setting a take profit has almost the same importance as setting a stop loss .

• Profit management - it can be used both to increase the volume of opened transactions, and simply withdrawn; it is better to use both options.

Here is an almost complete breakdown of the measures for implementing Money Management in Forex. Compliance with all the above points will not allow you to lose the money you have, but the profitability of trading will depend only on the effectiveness of the Forex strategy used .