money management in foreign exchange mercantilism functions to manage our trade, therefore we have a tendency not to underestimate the ability of our capital. therefore squared size will not cause loss of pain after we are wrong in predictions or analysis. and money management is to invest in such a way that even if the market moves to the worst position you might not lose your account and end up with nothing. If your money management is bad, you may be looser. So, you must be good at managing money. For example, it can help us risk only 3 dollars if we have 100 dollars in capital.