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

Hi folks.I believe scalping is so dangerous for your account . of course for new traders.Try to write your strategy in an EA and test is more and more times to handle the bugs .In it you should define entery point,Trend,SL point and TP for each order and the reason for entering and getting out.With checking strategy on paper you'd eliminate some faults because you like your strategy to be profitable and a lot more reason .pardon me for my poor English.
mehdi

Hi Shabz,

Please advise on the time frame you used to trade. Thanks.

C Ling

HOW DO YOU EXIT shabZ?

Very effective strategy using technical indicators. MA 5 and 20 and MACD. if the MA 5 crosses the 20 upwards, you would go long, and vice versa if the cross is a downwards cross. when spotting the cross, look at the MACD Histogram to confirm whether there is an actual downtrend or uptrend, you could also use the RSI to check whether going short or long is the right thing to do at the moment. This is a simple strategy which has made me net profit of £26,500 in 3 weeks with an opening balance of just £2000. It is high risk but with high risk comes high reward ;).

shabz.

Pls. do send me trading strategy techniques on my email;[email protected]. I will be glad to hear from you soon Segun Idowu [Nigeria]

I think risk to reward ratio should depends on your trading strategy! I used 1:1, trade once in a day on EurUsd.

for me the best money management is maximum of 1% tolerable risk per trade...

Great information, thanks much

Never use risk reward ratio 1:1 , 2:1, 3:1 and so on. Means don't trade on low profit and high loss other wise it will emptied your account in few days .

Forex 10 major rules by Osama Bin Ishrat :

1. Look risk before trade and don't look on profit or number of pips .
2. Keep in mind your risk level that how much money you are going to loose per trade.
3. For long trade always use ,:3 or 1:4 means low lose and high profit .
4. Use trailing stop if you are use to or place S/L at break even when you're in profit.
5. S/L should take place on each trade. this is the point where a lot of peeps loose their account in a while.
6. For beginners risk should be 1-2% per trade.
7. Do not increase lot size in start , always increase volume when your deposit is double. Example:If your deposit is 300$ you should start trade with one point = 0.01
If your deposit reaches 600$ you can increase lot size = 0.02 and so on...
8. Study chart patters if you can or use indicators but prefer to use chart patters as they give more probability than indicators . How ever indicators can also give good result some times .
9. Never do trade when you're confused about chart pattern i.e whether it is head and shoulder or double bottom. Wait for a right pattern then start trade.
10. Never use risk reward ratio 1:1 , 2:1, 3:1 and so on. Means don't trade on low profit and high loss other wise it will emptied your account in few days .

Thanks if you thought it is efficient for any one or beginners .
Osama Bin Ishrat
Pakistan

This site is great, thanks to the 3:1 explanation.

good
think one needs this, confidence is capital

Hi Sarah,

Could you please share what kind of scalping system do you use.
Thanks in advance
RH

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.