There are a lot of Systems out there and they all have there moments. Most of the information you read from the creator of that system show fantastic results and making huge amounts with very little money in the account. Sound familiar. What they are not telling you is that they are showing you the worst way to trade, OVER LEVERAGING YOUR ACCOUNT. This is why we developed the PIP Calculator. This will give you guidelines to follow when trading.
Most beginning traders believe that a good entry into the market is the key to success.
Unfortunately most are very wrong. Money Management is by far the most important criteria of
trading, Every successful trader will agree that managing your trades correctly is the most crucial element to consistently increasing your bottom line. Not to mention managing your money correctly, by limiting your risk to 2% to 10% of your account balance, at any given moment, in open positions, which will reflect your lots or trade positions.
Losing a trade or several trades in a row is just part of trading, get use to it. Unfortunately, markets move in unpredictable ways at times and even the best programs, even the ones I have reviewed, are not always right. In fact, most professional money managers trade with systems that are right only 50% of the time. How can they make the huge returns they claim if they are only profitable 50% of the time? Money Management!
If you're able to effectively manage your money you only need to be right about 50% of the time. The unfortunate thing about 95% of the current traders is that there primary focus tends to always be on making money and not protecting their account balance or profits. This is where the Money Management PIP Calculator helps with this problem.
Let's assume for each $1000 we use to control a position that we are only willing to loose $100.00. Now we will also assume that for every trade you enter you expect to make at least twice what you're willing to loose. In the event your position goes your way, you would set a limit order for $200.00 and we will assume you have made a totaL of 10 trades, 5 winners and 5 losers. 5 Losses would be -$500 and 5 wins would be $1000. You have just increased your account by $500 and you are only right half the time.
The 7 Rules of good Money Management.
- DO NOT ENTER ANY TRADE WITHOUT A STOP LOSS.
- Always trade with a Risk Reward Ratio of 1 1/2 to 1 or better on every trade
- Never over leverage your account. True. Over risking will leave you with nothing for the next trade.
- Make realistic goals that can be achieved within reason. Take what the market gives you.
- Losses are part of Trading. move on to the next trade, and trust your system
- Take profits off the table in every trade.
- Only trade with money you can afford to loose. This will help your emotions in trading.
PIP Calculator comes with mouse over information to give you guide lines on how much to enter on a trade with most Currency pairs. It is set to work with all currency pairs. Click Money Management PIP Calculator for the calculator.
Marvin Evans HBSFI. Inc
AP - Another day, another bailout. The U.S. government stepped in Tuesday to rescue American International Group Inc., one of the world's largest insurers, with an $85 billion injection of taxpayer money.
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