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Money management rules (How to avoid losing your first/next Forex account)

Video by Rob Booker





Hello,
I'm new to trading forex and hope to quit my job since forex is the most profitable business which i have encounter. However i like to start trading with only USD $3000 and i heard that its best only to risk 3 - 4% of my account per trade. But if that is so, do my take profit amount always have to be greater than my stop loss amount? Because i can only effort to lose $70 - $100 per trade if i follow the 3 - 4 % rule. Hope you could help me with this :)

Best regards,
Jeff

It depends on your trading style scalping or intraday...and what pair you traded.. how many pips SL will be placed... if intraday should take Risk:Reward ratio at least 1:3 or 1:5

Thanks for your reply :)

Jeff

he is soo right. i started 3 months ago with a $3000 USD account. i tried to be the trader i thought i had to be and lost it all. I am best at scalping and love it, so now i just do that and with just a $1000 USD account now have it up to 5 grand in just a month.
Thank you for all your wonderful help and tips Edward, your the man!
kind regards
Sarah. xx

Hello Sarah
Can you elaborate by what you mean by 'scalping' 8).
I am new to this and want to be realistic about my expectations.
Kind Regards
RR

what is scalping??

Wale

Scalping is act of buying and selling stocks quickly in order to earn quick profits
Bernard

I would just like to pass something along with everybody since this website has given me so much. A great money management system is a 3:1 profit to loss ratio. I tend to use a 30 pip stop loss and aim to pick up at least 90 pips. A low risk way to catch large pips while using a small stop loss would be to look for trend line breaks and patterns. This way, you would have to be wrong three times in a row to give back what you already took from the market. Even if you lost once and won once, you already made back 2 times what you lost. Combine this with a 50 percent profitable trading system and pyramiding (averaging into a position) and you will become a millionaire in a few short years.