thougths

[Jm1981]

I am not active but am looking for comments on what money management I am looking at: open at $1000, gains of 10 pip a day, stop loss of 15 pip. What is a good ratio of gain to loss? I can only lose up to 2% a day and then stop.

Any suggestions ?

[Enivid]

First, it's a very good thing that you are starting with thinking about money management ! That's what many new traders usually miss. Second, setting such goals as "10 pips per day" is a road to nowhere in Forex. The daily market situation is different and sometimes it's prudent to gain more and sometimes it's better to just stay off the market.

With $1,000 I'd recommend using a leverage of 1:100 and risk no more than 1% of your capital ($10) per trade. That means that your stop-loss should always be set the way that if you lose, the resulting loss is no more than $10 - usually it's 10 pips on such currency pair as EUR/USD with 0.1 standard lot position (mini Forex lot). For take-profit/stop-loss ratio I'd recommend at least 1:1, but 2:1 is much better, unless you plan to be scalping. In the latter case I'd recommend 1:1.5 ratio.

With $1,000 it's better to be able to trade with more flexibility than 0.1 standard lot per position, so I'd recommend a Forex broker, which allows very flexible position size step. Good examples are: FXOpen, InstaForex, Forex4you, Marketiva and LiteForex.

[Sofia]

Interesting comment Enivid! Money management in very important is any type of trading and especially when you are looking yourself as a long term trader.

[daniellefr]

yes, I agree. 1% risk sounds about right with your investment amount(In general never go over 3%).

[Sofia]

I will just say, it has been always a good practice for starters not to pour all of their wealth into the entire thing. It is common for beginners not to win on the first round. This is one of those fields that do not take the beginner's luck philosophy. Since you are just starting, your goal should be not to earn right away, but learn as much as you can and commit as much mistakes as possible so you would know what not to do in future endeavors.