Search:

An article on Currency Trading and related topics

For additional information and special deals related to some of the items on this article, place your cursor over the double-underlined links. All information supplied by Kontera.com

Money Management

By: Roy Masters

Money management is a critical part of any successful trading strategy and one area that is easily over looked. In essence, there are three basic calculations that you should be making prior to entering a trade and should form part of your trading plan.

1. How much of your total portfolio will be used to enter a trade. For the purchase of regular blue chip shares, I would suggest between 10-20% no more. If trading CFDs Options etc, you may want to lower this figure to 5-10%

2. What is that maximum you are prepared to loose on this trade, if it goes bad? This is where your stop loss will be used. I would recommend not risking any more than 10-15% of the amount that you have invested.

3. If you were to get stopped out; how much of your total portfolio would you loose?

For example if you have $10,000 in your trading account. You use $2000 to enter a trade (20%), you set a stop loss 10% below your buy price. The maximum that you could loose would be $200 or 2% of your total account which is acceptable. It is best to keep this figure within 1 to 3%.

Article Source: http://ezine-articles-planet.com

Roy Masters is a technical writer and Chief Analyst for www.masterfultrading.com.

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Currency Trading Articles Via RSS!

Additional Articles From - Home | Finance | Currency Trading

Authors, Sign Up for a free account or learn more.

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Writers/Authors Submission Guidelines
Member Login
Submit Articles
Most Popular Articles

Publishers Article RSS Feeds
Terms of Service

Free Affiliate Training

Share This Page:

Site Information Link to Us
About Us
Site Blog
Contact Us
Privacy Policy
Multi Site Article Search
Links Directory

AdSense Secrets v4.0

First Universal Platnum $7500 Guaranteed

Is This Site Useful?
If you found this site useful, please consider buy the webmaster coffee and get a free link back to your site!

Thanks for your support!

Please Rate and Vote For Us: