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 depot by more than 10 times, of course, there are strategies that suggest more risky Forex strategies, but now we are talking about using Money Management.

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

• Diversification for Forex - in our case, this is the discovery of several transactions in various 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 using it, two positions on one currency pair are simultaneously opened, but in different directions. The installation of the feet of the Loss allows you to close the unprofitable of two transactions after a certain time.

• Stop order - Take Profit and Stop Loss A prerequisite for the opening of any of the transactions, the installation of delayed orders is no exception. Moreover, the exposure of the Take Profit has almost the same meaning as the installation of the stop loss .

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

Here is an almost complete decoding of measures to introduce Money Management to Forex, compliance with all the above points will not allow you to lose the money available, but the profitability of trade will already depend only on the effectiveness of the Forex strategy .