• Capital Management in Forex


Learn how to make money management in Forex.

If I had to pick a single "secret" to tell the Forex would be exactly this: capital management.

Learning to deal with risk and your money will keep you alive when all else fails.

Absolutely no system or method of operation will save you the Forex market if you do not know how to protect your hard-earned money.

Throughout his career working as a Forex trader you will meet many stories of failure. When faced with a success story and look to deepen the reasons you may discover that the last trader standing was the one who took care of your money better.

The purpose of this article is to put you on the path to becoming this trader.

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  • Capital Management in Forex: Why the Attack is the Best Defense

Have you ever stopped to think about the amount of variables that are associated with the operations in Forex?

Economic news last minute changes in the mood of the market entry of large players in the game, changing operating session, your physical and psychological state ... among other things.

Many traders waste their time trying to control these uncontrollable things or simply seeking guess the next step will follow the graph. Your energy should not be wasted on things that are beyond you. Focusing on what you can keep within your horizon and ability to manage is the only possible solution, rational and profitable.

Before you worry about how much you can win, think about what you can lose.

The professional trader knows that controlling leverage and the percentage of risk involved in each trader is the most important part of an operation. Years ago when I did not know it went bankrupt. I learned the hard way, losing a lot of money to the market, for wanting to play with the risk with my capital and leverage.

In summary, before becoming a trader I was a player. And players think in reverse, are more concerned with what he has to gain than to lose what may. Think about it.

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  • The Mathematics of Capital Management in Forex

Lose less money when you lose more money when they win. Simple on paper, it seems impossible for some practice. That's because stop, leverage and risk percentage per trade confuse the minds of many people.

Not intend to exhaust the subject. I think much of the process is very personal, in addition to stop talking is to enter a complicated topic. There are so many different ways to plan this part of your operation well before recommend trying to define what is right for you.

But regardless of how set your stop, control and leverage as endangers each operation. I'll only talk about how I do things on my "operating room."

About stop just say I do not use a stop fixed in terms of pips. My stop will never be always 50 pips or any other value accordingly. It varies according to market conditions and hours of operation. But what never changes is my risk per trade: either use a maximum percentage of 2% or a fixed value. The possibility I fail currently operating in this way is remote.

Given this, how to make it happen in practice?

From now on we will always look as if we are using the fixed percentage.

Say I want to perform an operation and realize that if you buy a whole lot of the pair, according to the position of my stop and my goal would be risking 10% of my capital. There are 4 options:

Give up the trade. This is always an option to consider. Remember to stay out of the market is also a decision operation.

Reduce your goal. Ok, you can do that, but then what would be the point? Rs. Seriously, if you do not want to take risks then you're in the wrong market. And if you are always reducing their ability to profit never make money in Forex.

Reduce your stop. Given the characteristic volatile market, it's not smart to reduce the level you calculated as being safe to endure the market variation. The most likely doing this operation to complete before becoming profitable.

Change your leverage. This is among the smartest alternative. Say modify your lot to 0,4 let her stop in 1.8% of the size of your account. You can accept this value or even slightly raise your lot (most recommended) because it is within its safety margin of 2% and because values ​​below this undermine your ability to get a good profit.

Ready. It's that simple. Only basic math and common sense.

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  • Capital Management in Forex: Do not Lose Money is Fun

The Forex has a magical aura around him where you see the people getting rich overnight, astronomical profits, strong emotions. Tons of new traders come to the market thinking they are missing all this fun.

The Forex is not an amusement park and however cool it is to make money even say that fun is not losing money.

Although having a method of operating on Forex Price Action as it is important to develop the ability to manage their capital and risk correctly is essential.

As stated earlier in this article, many traders waste time and energy on things they can not control and often it is at the root of why your trading account goes nowhere or just walk back.

Spend your time wisely effectively, learning how to protect your work tool that is your money. The path for this is just one: manage capital in Forex in order to keep the risk low and losses consistent with the probability that - if they come - you can never withdraw from the market.

And you already practice capital management in its operations in Forex? What protection rules do you use? Leave your comments and help other traders to improve their money management in Forex.

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