Forex Money Management

Forex money management is one of the most important aspects of forex trading and also the one most overlooked by traders. Many traders get so caught up in the action of picking the right trades they never take the time to set up a forex money management system to protect their profits. Trading without a forex money management strategy is very risky and may result in you losing all of the profit you worked so hard to generate. By establishing a few simple rules for your forex account, forex money management can ensure that you are profitable over the long run and can actually keep more of your profits from your trading activities.
The basic concepts behind a good forex money management strategy are to protect your account from major losses on a series of trades. The reason this is important is that even the best forex trading strategies will produce trades that are not profitable. If a series of these trades occur in a row and you are not practicing good forex money management, you could lose all of your money before you are able to make trades that are profitable. For example, if your trading strategy produces a successful trading level of 75% profitable trades, that still means you’ll lose money on 25 out of 100 trades you make. If 15 of those trades that lose you money occur early they could wipe out your money before you get to make the 75 trades that are profitable. Having a forex money management system in place assures you that the funds you’ll need for the profitable trades will be in your account when you need them.
Another important aspect of good forex money management is to only invest a small portion of your account on each trade. This is a hard thing to do for most new investors because they are lured into trying to make big profits on a single trade. Statistics will show you that a smaller profit over a large number of trades is much more profitable over time than taking bigger risks on a small number of trades. By limiting your investment on each trade to a small portion of your account, your profits may be smaller on each trade you make, but your losses will be smaller as well. Over the course of a year a stable trading strategy will produce a sizeable profit if you follow this basic rule of forex money management and will help you avoid the pitfall of devastating losses as well.
A good practice to follow with forex money management is to try to make the trades with the best risk to reward ratio. If you stick to the trades that show the most promise for this ratio, you can enjoy a more consistent profit over the balance of your trades. This sounds like a simple forex money management principle, but many traders look to the riskier trades because of the potential profits involved. The challenge with following this type of strategy is that the potential for losses is greater as well and over the course of many trades this type of trading strategy will actually produce a smaller sustained profit for your account. By sticking to trades with a risk reward ratio of about 3% will ensure that your account grows over time, even with the occasional losses, which are inevitable.
Average user rating: 10/10
Reviewer: Christopher Leyton
Website: Forex Megadroid
The Forex Megadroid is a robot trading program that was developed using the 38 combined years of experience of its two founders. They were both involved with forex trading for most of their career and employ the techniques that Forex Megadroid is based on in their own trading strategies.
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Average user rating: 9,5/10
Reviewer: Christopher Leyton
Website: Fap Turbo
Automated forex trading programs are abundant on the web and every one of them uses a slightly different method to trigger the trades it makes. The FAP Turbo program is a slightly more sophisticated program for forex trading and is actually based on an older program known as forex autopilot, hence the name FAP turbo.
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Average user rating: 9,5/10
Reviewer: Christopher Leyton
Website: Forex Bling
Forex Bling (by Yohanes R. Gagahlin) is a forex trading system that can be used by any investor to increase their trading averages and help them build a profitable forex account. The system is based on years of trading experience and includes several different types of forex trading strategies.
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Average user rating: 9,5/10
Reviewer: Christopher Leyton
Website: LMT Forex Formula
The LMT Forex Formula is a unique system for forex trading that allows you to place trades that have a high probability of generating huge profits. The system concentrates on specific forex trades that have the potential of strong trending and allows you to take a position on these currencies and capture the profit.
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Average user rating: 9,5/10
Reviewer: Christopher Leyton
Website: Forex Rebellion
The Forex Rebellion trading system is a very effective way to help the average trader improve their trading accuracy and increase their profits substantially. Unlike many of the automated robot trading systems, the Forex Rebellion trading solution is a trade advisor that allows you to make your own trades based on the details the system provides.
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