Components of Good money management

Money management is the essential ingredients that every successful forex traders use to make big money from the forex market. Money management is an act of managing your trading account consistent so that you can continue to trade and make big profit. It is a process of managing your loses and maximizing your profit in order to stay profitable for a long period of time. What I’m trying to say in essence is that you must lose some times a forex trader, but with proper money management, that lose would not affect your overall trading capital and with that your can keep your head above waters.  Money management is an important subject in forex trading. In fact it is the key that would open the door to great wealth trading the forex.
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Here are three good strategies you can use

Using Stop Loss

Stop loss is one of the most important components you must integrate into your money management strategy. When calculating your stop loss, make sure that it falls in line with your money management principle. Before you proceed to using stop loss, you must first determine the percentage of money you are willing to risk in case the market goes against you. Be certain that you are not risking much. Remember there would always opportunity for another trade to make big money. So use proper stop loss. Some people use risk 1%, others 2% and so on. Determine what is best for you. The best percent you can risk is 2%.

Trade management

This can best be described as the process of managing your trades while your position is on. Many traders tend to adjust their trades for bigger profit while in a trade and also they tend to protect their account in order to forestall losses. Take for example, when a trade is on and in profit, you can devise a process of adjusting your stop loss to the extent that you are not risking any amount of money in that trade. Also you can keep moving your take profit until you notice that the market has reached its daily range. If you understand this process very well, you make more money and trade risk free.