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Good Monday!!!
Professional viability and financial success trader rest on three pillars of trade:
1. Profitable Trading System
2. Risk Management and Capital Management
3. Psychological resistance
The figure of 50% is the number of Murphy. Financial experts recommend an even smaller percentage of 5-30% of the deposit. That is more than half of its own funds should be left for use in non-standard situations and to continue work effectively.
2. Invest in a position of less than 10-15% of the total capital.
This allows you to protect yourself from bankruptcy, the cause of which could be the wrong risk management, in which all funds are invested in a single transaction.
3. The rate of risk in each transaction must be less than 5% of the total funds.
By complying with this principle, while losing trades losses trader to be less than 5% of its total capital. Some analysts recommend to reduce this figure to 1.5-2%.
4. Open the position of one group of instruments in the amount of guarantee fees of less than 20-25% of the capital.
Instruments of one group is inherent, as a rule, the same movement. Open big positions in the same group as impractical in terms of diversification.
5. The level of portfolio diversification.
Diversification - a reliable way to pass the reduction of risks, but it also should be a measure. It is necessary to maintain a reasonable balance between diversification and concentration. For reliable diversification will be enough to open positions on 4-6 different groups of instruments.
6. Setting the stop orders (Stop Loss).
At the stop-loss level affects the willingness of the trader to losses in the current transaction and analysis of trader market situation.
7. Determination of the rate of profit.
For each potential transaction should be determined by the ratio of the rate of profit and loss. They must be balanced against each other in case the market moves in the wrong direction. The common ratio is 3 to 1.
8. Opening several positions.
Opening in the forex market a few positions on the same instrument, the trader highlights and trend trading positions. The purpose of the first - a short-term trading. They are limited to close stop orders that are executed when the price reaches the stop level. In trending position stop orders more distant.
Keep calm and make money!
Anastasiia
Professional viability and financial success trader rest on three pillars of trade:
1. Profitable Trading System
2. Risk Management and Capital Management
3. Psychological resistance
Money management rules are based on the following principles:
1. Invest no more than half of the total capital.The figure of 50% is the number of Murphy. Financial experts recommend an even smaller percentage of 5-30% of the deposit. That is more than half of its own funds should be left for use in non-standard situations and to continue work effectively.
2. Invest in a position of less than 10-15% of the total capital.
This allows you to protect yourself from bankruptcy, the cause of which could be the wrong risk management, in which all funds are invested in a single transaction.
3. The rate of risk in each transaction must be less than 5% of the total funds.
By complying with this principle, while losing trades losses trader to be less than 5% of its total capital. Some analysts recommend to reduce this figure to 1.5-2%.
4. Open the position of one group of instruments in the amount of guarantee fees of less than 20-25% of the capital.
Instruments of one group is inherent, as a rule, the same movement. Open big positions in the same group as impractical in terms of diversification.
5. The level of portfolio diversification.
Diversification - a reliable way to pass the reduction of risks, but it also should be a measure. It is necessary to maintain a reasonable balance between diversification and concentration. For reliable diversification will be enough to open positions on 4-6 different groups of instruments.
6. Setting the stop orders (Stop Loss).
At the stop-loss level affects the willingness of the trader to losses in the current transaction and analysis of trader market situation.
7. Determination of the rate of profit.
For each potential transaction should be determined by the ratio of the rate of profit and loss. They must be balanced against each other in case the market moves in the wrong direction. The common ratio is 3 to 1.
8. Opening several positions.
Opening in the forex market a few positions on the same instrument, the trader highlights and trend trading positions. The purpose of the first - a short-term trading. They are limited to close stop orders that are executed when the price reaches the stop level. In trending position stop orders more distant.
Keep calm and make money!
Anastasiia