Successful trading consists of three factors:
- Psychology 50%
- Money Management 30%
- Market Analysis and Trading Systems 20%
Most of traders spend most of their time looking for good trades and only focus in the last factor, Market Analysis and Trading Systems, which is the least influence on successful trading.
Once traders enter a trade, they rely on their emotions to make their trading decisions and miss the essential
element of winning, the management of their emotions. Their lacking of managing themselves leads to poor money management of their trading portfolios.
Without a method of managing your money, even the best trading system or strategy is absolutely worthless.
The 100%-win trading system does not exist, therefore the strict money management rules will provide a safety net for traders.
That’s why the money management is so important in trading.
The major goals of money management rules are:
- Ensuring survival in markets
- Earning steady rate of return from trading
- Earning high return from trading
Lastly, A most importance rule of managing your trading money is Do not change money management rule while the opened position is not yet closed.
Note : For traders who interested, please visit the Trading Money Management corner in our store.
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