Money Management
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  1. #1
    Join Date
    Mar 2006
    Posts
    5

    Default Money Management

    Hello everyone,

    I know I'm pretty new to the forex world but I've browsed around and must say that this site is probably the best resource for beginners. I'm sure there are plenty of other sites but maybe I just haven't found them yet. It's also good to know that there is a large community out there that is willing to help.

    Ok, enough ranting. My question is that I've browsed many forums and I keep hearing traders mentioning good money mangement. Is there a book or ebook that teaches good money management?

    Thanks for your help in advance.

  2. #2
    Join Date
    Mar 2006
    Location
    USA
    Posts
    14
    Money management is how much money you risk on each trade and how much of a loss you are willing to take on a trade.

    For instance, most traders do not risk more than 3% - 5% on any one trade. Me personally, I never trade larger than 1% of my account on any single trade. Money management is a great skill to learn in the event you have a string of losses you can keep the drawdown to a minimum.

  3. #3
    You should read Dr. Alexander Elderís Trading for a Living.

    It cover money management in depth.

    If you wait a couple months, his new book "The Complete Trading for a Living" comes out soon for $40. It combines Trading for a Living and the Study Guide which would sells separately for $120.

  4. #4
    Join Date
    Sep 2010
    Location
    Monterey Park, CA
    Posts
    19

    Post Many Other Factors

    The following factors should help to calculate the risk percentage.

    1) Margin
    2) Lot size
    3) Number of lots traded
    4) Target profit
    5) Account balance

  5. #5
    Join Date
    Nov 2009
    Location
    Gozo
    Posts
    627
    Read some of Ralph Vince's books, IIRC the titles are "the trading game" and "the mathematics of money management"

    you might also want to check out van tharps report on MM

    all of the above are in ebook format and esaily findable.

  6. #6
    Join Date
    Nov 2009
    Posts
    383
    How did this thread pop up again. It was started in '06

  7. #7
    Join Date
    Sep 2010
    Location
    Monterey Park, CA
    Posts
    19
    I started it again when I first resgistered earlier this month. I am new to Baby Pips.

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