Money Management

Today i will explain about basic Money Management, this is the key to sustain in Forex trading.

Let say we start trading Forex with USD 1000 account,

1.we should trade with only 2.5% of capital per trading post.

eg: with a mini account, u can trade as low as 1 cent/ pips..
2.5% out of 1000usd is USD25. that is 25 cent/pips

if 1 day u win about 30 pips, it is equal to USD 7.50 a day. and if u have a really bad luck for that day, let say u lost few trades and its total up to -100 pips, u are just only lost USD25 out of USD 1000, u still have USD 975 to cover..

2.always set our win or loss ratio. min win and loss ratio should be around 2:1 and above,

eg: if win 60 pips and lost -30 pips

so with 1 win, u can cover 2 losses.

3. With this strategy, u should be able to sustain and slowly grow up your account value.