Money management is not the only domain of the wealth manager, regardless of the initial capital we have, of course we can use this technique even if our trading account with our forex broker or binary options broker is not as big as account managed by a wealth manager. Money management begins to work among traders from the moment a position is taken in the market, many experienced traders and trainers establish a relationship between trading and money management that before taking a market position. in the market we become real managers of capital and risk.
Money management mainly consists of determining the amount of risk in a trading operation to maximize our results in our trading sessions. Knowing how to use good money management allows us as an entrepreneur to make the difference between our success and those who suffer failure. Money management is technical and based only on the objective of maximizing its return without forcing us to take careless risks that will push us to lose our capital.
Other data should be seen in a self-managed money account, data that tells us when to adjust the size of the positions if our capital changes (increases or decreases ) depending on the market conditions and the trading strategy we follow. in addition to stoploss (maximum loss allowed per position) and takeprofit (target profit per position).
In short, money management is one of the most exciting aspects of forex trading but also one of the most important, many new traders tend to ignore this part of the trading plan and often end up broke! Incorporating good money management into your trading strategy allows us as traders to increase our chances of making money in Forex.