How many trades can you afford to Lose?

Posted on 30. Sep, 2009 by admin in How To, Link Love, Random Noise

A common mistake by forex trader, specially news ones, is to underestimate the value of good money management. I sure did this for a long time as well. Using too much leverage on trades is something which will wipe out your account in no time! Often I even see traders apply some level of a martingale strategy, which in my opinion is even worse. Another common practice is to add up, into already loosing trades. Strategies like these might a first sight seems to have some valuable motives but in the end you expose yourself to more risk, and often without changing the reward. The admin over at Trainee Trader has written a great post on this subject, which should help you to understand the importance of good money management. Check it out here.