How to handle my money properly in trading world

Beginner Questions Trading Psychology
1

Hi guys,

I have some conversation with traders that trades in HYMarkets and they told me that they were enjoying trading … I know that trading would be addicted especially when i am beginning to earn money and enjoying it just like i play games… But i am just a bit afraid on how to handle my money properly when i began to trade…

Any comments, articles or links that would help me to realize how to handle trading psychology properly?

2

First of all, Trading as a whole is not hobby like video games. It is a career or a business…
A hobby and a business are two different things and you will treat them differently.

Second, ask yourself, why Forex? What is it that you are interested about and want to test yourself with this very complex world?

Third, if you do not know how to handle your money now, you will have trouble when you start to make a lot of money later. Start handling your money properly right now so you know what to do later.

There are some good read about Psychology on this link…Pipsychology - Forex Blog: Psychology of Forex Currency Trading

Also, here are couple of books for you to read with the psychological aspect of it. I am sure there are more…

Trading for a Living: Psychology, Trading Tactics, Money Management by Alexander Elder
Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude by Mark Douglas

3

The only tip I can give you is written in every broker’s disclaimer and it’s ‘don’t risk more than you can afford to lose’. It’s a pretty blunt statement but it gives you one of the worst possible scenarios(fact). Trading in the Zone is a good recommendation and is well worth the investment.

4

Hey, burning yourself is part of the process. Gradually you will realize the truth and somtimes thats the only way to actually understant trading. My best advice is learn but dont be hard headed. Dont keep risking too much and learn to find out your comfort zone risk per trade! and use stop losses

5

Hi PipNRoll,

Thank you for your great advice and links that you have provided.

I am currently reading them, and it gave me a lot of ideas on how to handle my money properly.

6

Hi Enoch7,

Thank you for your response.

What do you mean by finding out my comfort zone risk per trade?

7

basically we all hear the 2% risk per trade thing… but for some people 2% risk may be too small. find how much you’re comfortable with risking per trade… it could be 5% or maybe even 9%… but always remember it also must reflect skill it would be pointless to risk 7% per trade if you’re strike rate is poor…

8

In okamiraito’s case, he/she is better advised to risk one percent or less.

okamiraito,
it’s too presumptuous that you will easily succeed and therefore worry about ‘big money’ in the near future.
That is a potential problem but far ahead in your trading journey. You have to address the realistic issues first - the current problems/obstacles - rather than concern yourself of ‘future’ problems. You are thinking too far ahead.

9

Hi FringFX,

Yeah I think you are also right, Upon reading about trading forex… I worry a lot…

Anyway, thank you for your comment. :smiley:

10

Hi Enoch7,

Thanks. I clearly understand what you meant… :smiley: I appreciate it a lot…

With your experience, what percentage you usually risk at the time when you were starting to trade forex?

11

2%- 4% depending on confidence is always a good marker. The market is always going to be there and its important to learn patience and test your system relentlessly. Impatience can be a killer in this business so don’t be rash and risk more than you can afford to lose, as if you do so and lose, you create an avoidable mountain to climb back to base.

12

Hi people,

I’ve come across a really useful blog that you may be interested in reading which is from HY Markets…

HY Markets Forex Blog | Online Forex Trading blog.

There’s generally 2 to 3 posts per day on market conditions and trading tips.

I’m quite new to trading but thought it worthwhile sharing with you.

Definitely worth a look. Here’s some of their latest posts which will help you.

Choosing the Right Forex Broker For Your – 10 Things to Consider
Essential Rules for Successful Trading (Parts 1, 2 and 3).

Hope you find this useful and if there’s any others you come across I’ll be keen to hear about them.

Thanks!

13

Another 3 second of my life wasted…

14

Hi stonecoldmichael,

you have a point there… it will really be hard to climb back to base…

I think i need to risk a smaller percentage then when i get used to it i will try to increase the percentage of money that i will risk… :smiley:

15

Hi Pellis,

Thanks for the link. i will get across with it… :smiley:

16

Don’t be too quick or keen to raise your % of risk too much. There is better and more sustainable profit to be had from consistant and cumulative wins, than from greater risk. If you risk a higher % and lose, this can be devastating. If you risk the same each trade, win even as little as 51% of the time, then even with a relatively high level of loss you should still be in a profitable position. The more you risk, the more of an impact a loss will have on you psycholocically as well as financially.

17

With high amount in your trading account and having experience risky trading will be profitable for you .Certainly you will manage your amount . But as a beginner you should take small risks, do trading in low lots so that you can easily manage it.