Poor Money Management.

[Anthony23]

Not only beginners have inability to handle money, but experienced people too. These are types of people who are always few and they don't learn from mistakes. Some of them can learn and some will lose their whole lives, it's a fact.

 

[William Barnes]

Today many foreign currency traders are complaining that forex resembles to gambling/scam!! It is not the true fact we all know. However; it is essentially true for those you are not skilled enough or you are not able to properly manage his funds; time and risks. And without any doubt; a poor time and money management can lead to hazardous consequences in the forex market.

Money management covers certain essential aspects of trading: How much money a trader wants to invest? What is the targeted profit of a trader for his investment? Which broker will help him to properly manage his funds? Whether he will use various pending orders or he will use only market orders? By answering all these essential questions a trader becomes more efficient to handle his funds to achieve his trading goals.

 

[Morning1234]

Poor money management is when a trader wins, then wins, then wins and then loses the entire account. In the end, he won by pips, but lost money. Because the loss fell on the biggest lot.

 

[Naxramos]

Trading requires management skills as you have to manage your money in a viable way in order to gain healthy and regular profit. Many traders lose their money on the market due to their blind moves which always prove costly here on this risky market. Stay sharp!

 

[TrapLok]

Money management is the key to success on the Forex market as the market has huge risks which can be changed into rewards by using proper technjques. Successful traders always follow a single path in order to reach the destination. Thanks!

 

[Ken Smith]

Poor money management is one of the most exceedingly terrible record executioners for new traders. This backpedals to eagerness, since traders commonly overleverage while shooting for doubtful benefit targets. You ought to risk a little level of your record on each exchange, and you ought to risk a similar sum on each exchange. I prescribe failing to risk over 2% for every exchange. Numerous fruitful Forex traders risk 1% or less per exchange, and some exceptionally effective and experienced traders risk 3%.

Money management is the most important thing in forex trading. Good managment with an average strategy making profit is possible. But poor money management with best strategy resulting in loss. A good trader is a well money management follower. I personally do not use more than 2% of my capital. My total trades sum up 2% of my capital.

 

[Notati]

Money management is the primary requirement for trading safely on the Forex market. This management is necessary as the market is highly uncertain. You can never get a strategy with 100% workability which means it is important to take safety measures as well. Do you agree with me?

 

[Michele Rizzo]

Ok, honestly,the best money management is nothing, without experience. The market is unstable, so the money management can be variable depends on the market.

 

[nahiyar]

Very right you are zero with best money management techniques until you not know how and when to apply them. Even people loose successful and strong signals because of their less experience. In forex many things are involved that play role well when you use them in wise manner with experience . Your market reading should be well to manage your trading.

 

[Johnno26]

The biggest mistake new traders make is trying too hard to make a profit and being unwilling to a loss.

Imagine it like this, You learn that if you hold a trade open long enough, it will come back and show you a profit. This lesson is quickly confirmed because 9 out of 10 times it will. Particularly when you grab a profit as soon as it is on offer.

So as new traders do, you start with $1000 and open some trades and see some great success!

trade 1: $10 profit
trade 2: $5 profit
trade 3: $22 profit
trade 4: $2.50 profit

You realise at this point, that even if a trade moves -$100 against you, it can easily come back in your favor. So you tell yourself, all good, just don't set a stop loss and the trade will always swing back in your favour. This is easy!

trade 5: $12 profit

Trade 6: $1.50 profit (WOW, that last one was a close one, it went -$250 against me. So you tell yourself if that happens again, you will close the trade in a loss. $250 is the MAX!).

trade 7: $80 profit (sh!t, is trading easy or am I just that dam good! I've got 100% accuracy and am thinking of quitting my job and trading for a living. Yer, maybe in Thailand on a beach!)
trade 8: $10 profit
trade 9: $25 profit

On the 10th trade, the market moves against you. A massive -$250 against you, (dam, maybe I should get out. Well, let's see how it goes, I don't want to lose $250, it's too much money!)

You see the trade go further and further against you -$500 (you're sweating bullets now), then -$750 (jezz, I'll get out when it comes back to -$250, dear lord let this trade go back to -$250!)

Trump the comes out and jawbones the USD dollar. You were long and that trade goes soaring against you into a margin call - the entire account is GONE!

I am very happy to admit this is exactly what I did when I was new, and a few times after too.

I learnt if you cant take a small loss, you won't take a big loss and you will end up being forced to take a massive loss!