This is because money management is barely an afterthought for so many traders.
Many people avoid the topics of risk and money management because they realize that by controlling risk they will not become rich overnight. But the fact is that they will not become rich at all if they don't learn how to manage money.
One of the pillars of the industry is the search for the holy grail and indeed the industry is infatuated with trading systems. Many traders, specially those who go through that initial phase of frustrating losses, look for mechanized methods of trading that just generate entry and exit signals to follow, no questions asked. However, they rarely search for a a system of money management able to generate "signals" that dictate how to size and managepositions. But the reality is that these techniques exist and, although being mechanical, they are much more effective than mechanical buy and sell signal generators.
Have you ever stopped to ask yourself that question: if money is to be made through trading systems, why the big majority of individual traders end up break-even or losing money? This is because money management is barely an afterthought for so many traders.
While most novice traders think there is some kind of order to the market that only few people know, and tend to focus on finding an inefficiency or an edge in the markets, the greatest opportunity for profit is often found in amoney management method. The key to wealth accumulation in the markets does not come from knowing where you get in and out. Neither it comes from being able to accurately forecast market direction.
Successful traders are those who realize that money management has to be part of the trading plan. Sadly, many people never even come to this realization. Read More
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VIDEO: MONTHLY WEBINAR: Exploring the Coast Line of Foreign Exchange Land - Part I - Gonçalo MoreiraVIDEO: MONTHLY WEBINAR: Exploring the Coast Line of Foreign Exchange Land - Part II - Gonçalo Moreira
VIDEO: MONEY MANAGEMENT - Why your money management sucks and what to do about it! - Dirk du Toit
REPORT: Investing in currency - Richard Olsen
Editors’ Picks
EUR/USD hovers near 1.0700 ahead of US data
EUR/USD struggles to build on Wednesday's gains and fluctuates in a tight channel near 1.0700 on Thursday. The US Dollar holds its ground following the Fed-inspired decline as market focus shifts to mid-tier US data releases.
GBP/USD holds steady above 1.2500 following Wednesday's rebound
GBP/USD stays in a consolidation phase slightly above 1.2500 on Thursday after closing in the green on Wednesday. A mixed market mood caps the GBP/USD upside ahead of Unit Labor Costs and Jobless Claims data from the US.
Gold retreats to $2,300 despite falling US yields
Gold stays under bearish pressure and trades deep in negative territory at around $2,300 on Thursday. The benchmark 10-year US Treasury bond edges lower following the Fed's policy decisions but XAU/USD struggles to find a foothold.
Top 3 Price Prediction BTC, ETH, XRP: Altcoins to pump once BTC bottoms out, slow grind up for now
Bitcoin reclaiming above $59,200 would hint that BTC has already bottomed out, setting the tone for a run north. Ethereum holding above $2,900 keeps a bullish reversal pattern viable despite falling momentum. Ripple coils up for a move north as XRP bulls defend $0.5000.
Happy Apple day
Apple is due to report Q1 results today after the bell. Expectations are soft given that Apple’s Chinese business got a major hit in Q1 as competitors increased their market share against the giant Apple.
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