Money Management

How risky is Forex trading? If you look at the statistics you will see that 95% of retail currency traders lose their money and of course there are risks trading currencies as there are in any speculation but if you understand the risks you can win.

In this article, I am going to look at the basics of successful money management in Forex trading which will give you, a solid base of protection on which you can you build long term profits on. Let's look at the essential, money management basics for bigger profits in more detail.

Here we will look at 6 x money management mistakes which are made by traders which will not only slash profits, they can also wipe out trading account equity quickly so let's look at the key errors traders make in more detail.

Modern Portfolio Theory ( MPT) is popular and postulates, that by diversifying across a number of uncorrelated assets you can reduce the risk on your portfolio and increase the overall rate of return at the same time. Will it work in Forex trading and should you use it, as part of your Forex trading strategy? Let's take a look at the logic of the theory in more detail.

Any trader who reads any decent Forex education knows that, one of the keys to making money when trading currencies is to cut losses but despite knowing they should cut losses – most traders don't. So why do traders have so much trouble cutting losses? Lets take a look in more detail, at this key trading error and how to avoid it.