Good Money Management is The King

Many forex traders start trading live too soon. They don’t have any understanding and learning of good money management rules. As a forex trader, you need to develop a few good money management rules. Practice them on your demo account before starting live trading. By developing your own money management rules you are comfortable with means how much of your money you are willing to risk on one single trade.

Good money management can make a huge difference between becoming a successful forex trader in the long run or an unsuccessful one that blows up the account in a weeks. When you lose a trade, you become afraid to risk enough of your money on the next trade. Fear takes over and impairs your decision making, made you lose confidence in your judgment and decision making.

The most common factor that causes many forex traders blow their accounts is greed. Once you start taking greed then you are in trouble. You want a secret formula that never loses a trade. You will start looking for the Holy Grail technical indictor or a forex robot that can make you rich. You will believe that by discovering one, you will become rich. Unfortunately there is no Holy Grail.

You will win and you will lose. So you must learn not to risk more than 2% of your account on one trade. Grow your account time over time. Never ever be tempted to risk big making on a single winning trade that can make you rich. But if you want to be aggressive you can go up to 5%. But stay between 2 to 5%. Dont exceed it!

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