How To Make Money

 Three Money Management Strategies That Work
Poor money management is one of the factors behind the failure of most forex traders. If you’re not convinced, just look at how much time is spent by both industry experts and beginners on this topic. Experts point to money management as the virtue that any forex trader needs to succeed in the foreign currency market. Some beginners share how they lost money when they overlooked this important aspect of forex trading.

Trade with the preservation of your capital in mind; otherwise you will not succeed in the forex market. It makes sense without being complicated - risk only a small percentage of your total account so that you have enough money to use for other trades in case of a  profit loss. Simply put, it is true to the saying “don’t put all your eggs in one basket” or you may lose everything or almost all of what you have. Some recommend a maximum of 5 percent per trade while others recommend a little below or higher than this.

Limit Your Trading With a Small Percentage of Your Capital

These are three tried and tested approaches to managing your money in forex trading:

What exactly is cash asset management in the context of forex currency trading? It is controlling the flow of cash in and out of trade with the foremost objective of lessening your exposure to risk. Poor management, therefore, simply means wagering with your investment and exposing it to high risk. Many traders often forget that this is a very significant part of a system or strategy.

Maintain a Healthy Risk to Reward Ratio
Your prospects for losses should be smaller than your chances for profits; otherwise, do not trade. Do not consider selling nor buying as an course of action. Ideally, you should have a risk-to-reward ratio of 1:2 or as high as 1:3. In the long term, you will benefit from not risking more than you can potentially make because it will significantly boost your chances for stable profitability.

Cut your losses short, let your profits run

Some traders lose more money than they should because of “waiting for the market to turn back around.”  Get out of a trade when your losses are still small. If you’re making profits, don’t be consumed by greed and close the trade right away.  Many traders understand that by getting out early in the game (as soon as they make money) they could lose the chance to make much more profits if they stayed.

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