Trading Forex With Money Management

 

I believe the number one killer of forex accounts has to be the fact that most traders really don't use sound money management strategies.  I don't care how skillful a trader you are, if you are constantly overleveraging your account, you have no chance of long-term success.      

Traders (especially new ones) have to understand that trading is a long term battle.  If you put all your eggs in one basket (or trade) hoping to strike it rich, eventually one huge loss can completely wipe out your account.

First and foremost you should never trade with money that you can't afford to lose.  If you deposit funds in your brokerage account that is meant to be used to pay for groceries, then I strongly encourage you to think twice about trading forex.

Sadly, this is fairly common with many new traders.  They think of trading as if it was the "gold rush".  

Having this kind of mentality is not only incredibly dangerous to your brokerage account, but it also really lessens your chances of any kind of success as a trader.

Think about it.  Who do you think has a greater chance to succeed?  The trader who is trading with money that he needs to survive with or a trader who is using supplemental income?  Obviously it's the latter, and the only way to do this is with trading support and resistance.

The reason is simple.  How can you clearly focus on trading when you have so much pressure on every trade? When you have to make money on every trade, your emotions are going to get involved and pretty soon, you are not trading with your brain, you are trading with your heart. 

Making money trading the forex market requires an cool, even headed mindset.  Trading should not be exciting.  Your goal should be to act the same whether you make money on a trade or whether you lose money on a trade.

Trading is a job just like anything else.  You have to treat it as such, both in your money management, and how you handle your emotions when you take a trade.  Act as if its any other kind of business you would venture into.

Check out Trading In The Buff to Learn How To Trade Forex Successfully Just Using Price Action.

 Forex-Trading-Education

 

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