Money Management - application features.

The term "Money Management" is often perceived as something complicated and related to large sums of money.

Money Management – ​​capital management, measures to protect existing funds, and ways to increase their value.

In fact, all capital management in Forex can be boiled down to a few simple points:

• The deposit amount with a broker is only 50% of your total available funds; the other 50% is best kept in a bank account or invested (the percentage is higher). You should not risk your entire capital under any circumstances, 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 favorable moment or reduce its volume in relation to your deposit.

• Diversification in Forex - in our case, this is opening several transactions on different currency pairs, while trying to select pairs moving in different directions. It is better if these are instruments that do not have a direct relationship.

• Hedging is a rather controversial technique widely used to reduce risk. When using it, two positions are simultaneously opened on one currency pair, but in different directions. Setting a stop loss allows you to close the unprofitable of the two transactions after a certain time.

• Stop orders - take profit and stop loss are a mandatory condition when opening any of the transactions, and setting pending orders is no exception. Setting a take profit is almost as important as setting a stop loss .

Profit management can be used to increase the volume of trades opened, or simply withdraw profits; it's best to use both.

Here's a nearly complete breakdown of the steps for implementing Money Management in Forex. Following all the points listed will prevent you from losing your money, and trading profitability will depend solely on the effectiveness of the Forex strategy .