What is the function of Money Management in Forex?

[ali jee]

sir g ma tu ye he kaho ga k forex trading business money management ka bohot important role hai kiun k agar ap es business ma stop loss or take profit ko use karo gye tu long time tak trading kar sakho gye ye hai money management k aham function.

[rouka443]

the management capital is very important thing here in this market and you must be learning it to know how you use the take profit and stop loss and it is easy to learning it but you must be learning it

[youssef213]

yes yes of course to keep a more consistent trader in the trading, avoid greed in order to maximize profit there. I use a money management with daily profit targert 10 Pip......

[gamujtaba]

Money management system is the subsystem of the forex trading plan which controls how much you risk when you get an entry signal from your forex trading system. One of the best money management methods used by many professional forex traders is to always risk a fixed percentage of your equity (e.g. 3%) per position. By using this method a trader ****ually increases the size of his trades while he is winning and decreases the size of his trades when he is losing. Increasing the size of bets during a winning streak allows for a geometric growth of the trader's account (also known as profit compounding). Decreasing the size of bets during a losing streak minimizes the damage to the trader's equity. You can view interactive demonstration of this technique by opening the forex trading simulator (Please note: The size of this page is 0,6 Mbs and it requires that you have Flash installed and Javascript enabled in your browser).
Trading on forex allows to multiply your account over time - or to make it grow geometrically. Geometric capital growth is produced when the profits are reinvested into the trading which leads to progressively larger positions being taken and, consequently, to bigger profits and losses. The pace at which the account grows is controlled by the size of the profits and by their frequency (which should always be remembered by forex trading system developers). While the geometric equity growth can and should be smooth (i.e. consistent), some traders try to accelerate it by artificially inflating the size of their profits by risking very high percentages of their account. Because the actual sequence of the winning and the losing trades can never be predicted in advance, such practice results in very erratic trading performance (i.e. sharp equity fluctuations). Among other things this practice betrays the trader's lack of confidence in his or her trading system's long-term profit potential. As long as the trader is confident about his trading system he can risk small percentages (%1 to 3%) of his account on every trade and simply watch the system realize its potential. It should be noted that only the geometric capital growth allows to make regular profit withdrawals from an account (as a certain percent of the equity) without seriously affecting a trading system's money making ability. This contrasts sharply with the fixed-dollar-bet money management system (e.g. always risk $500 per trade) whose profits grow arithmetically and where each withdrawal from the account puts the system a fixed number of profitable trades back in time.
- See more at: http://www.forexhit.com/learn-forex/....chnRaCnM.dpuf

[ilyes48]

Hi of course to keep a more consistent trader in the trading, avoid greed in order to maximize profit there. I use a money management with daily profit targert 10 Pip.

[Leteipa]

money management is very crucial in that when trading you are able to understand whats going on in the market we have also seen that you avoid losing. sometimes you may think that you made the right choice in a trades but turns against so when you manage your account well you are able to survive well through that storm.

[adeelakhtar25]

Money managemnet forex business ma ak basic key ha jis ke bagair koi b trader forex business ma apni success ko yakeeni nahi bana sakta ha is liye sab se pehlay humein money mangement ko focus karna chahye takay hum forex business ma na sirf apni trades ko manage kar sakein balkay is ke sath sath success b kaar sakein.

[dimahamulkar]

It is the main function in forex trading. All you need to do is manage money properly without much risk involving so that all the trades can take place in a calculated way and even if the trades go against you then also you will have enough money to re do the process and get lost money back and earn more.

[faruq14]

The money management of the forex is very interesting matter where as lot of trader use the money management . If the new trader want to do this business then they will need to calculate the money then submit the trade , the good trader do always money manage then they will success.

[FAHEEM66]

Mony mangement bit hi best elemnt ha is ka use karny say ham margin call and dosry facor jo k zayda risky han on say bach skty han so hamn chyay k proper money manage karna chyay apnai position say paly is main hamn stop loss and total profit and resistance and support ko dakh lana chyay and gree ni karni chyay