How do you manage your capital?

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
24
32
Canada
Do you have the proper rules in place to protect your capital? Many are focused on how much they make, but not on how much they keep. So how do you manage your forex capital?
 

chief

Confirmed Tickmill Representative
Oct 27, 2014
217
7
37
money management are differ from usual account management. while account management more like term of lost size and margin calculation per trade. in the other hand money management is all about how you maintain your capital in total.
i have split my capital into several brokerage service, while my primary used brokerage service are with armada markets. there's a simple reason for this manner, a split account consist of leverage. when most traders underestimate important of leverage, mine this leverage are most important thing to consider. i use a lower leverage as the account balance higher, for example i use 1:500 with 200 usd with ifx, while with 2k usd with armada i only use 1:200 leverage.
 

F0r3x000

Trader
Jan 10, 2012
1
0
12
Less than 10% of capital on Forex. 30% on stocks, and the rest is on more conservative investments. So if I manage to double my Forex capital, I reinvest new money (from my income) on stocks and other funds in other to balance it again.
 

bablogfx

Confirmed HotForex Representative
Oct 24, 2013
190
3
27
Less than 10% of capital on Forex. 30% on stocks, and the rest is on more conservative investments. So if I manage to double my Forex capital, I reinvest new money (from my income) on stocks and other funds in other to balance it again.



Would you consider to invest in realty? I have withdrawn about 30K from my Hotforex equity and planning to buy apartments in the business centre of my town. Realty always rise, that's why it wise to consider it as a very stable and promising asset
 
Nov 4, 2014
17
3
12
How do I manage my Capital? I never break my Money Management System. This is very Simple. I have a Risk Ratio towards my trading balance and I calculate my balance before placing any trade. This is how I manage my capital and stay longer in this industry
 

joescholz

Banned
Aug 25, 2014
45
5
0
I manage my trading account by making it a rule to open a trade with only 2% of my account; also I trade with a very low leverage. Taking to the fact that traders are allowed a leverage of up to 1:500 on the Profitforex Platform, I make sure that I maintain a leverage of just 1:50 on my trades.
 

mr bean

Trader
May 13, 2013
31
0
17
we need money managerment plan. we need get the limit of reward/risk. you can lose in your trade but you do not worry. becaue it's in your plan. i think you should find some document about it. you will find your way
 

inggo

Banned
Jan 13, 2012
498
12
59
Philippinese
going through some money management books is a good option for confused traders, its an all around thing i mean it will help in forex and in your regular daily routine.
 

Bilal Jafar

Newbie
Nov 30, 2014
11
1
2
Do you have the proper rules in place to protect your capital? Many are focused on how much they make, but not on how much they keep. So how do you manage your forex capital?

My focus is more on securing the deposit, rather than increasing it with a hurry. That's the most dangerous part of forex trading when a trader is addicted to profits.. he forgets about the basic principle which is the decision making of how to keep your hard earned money "Secure".

That's where I focus on :)
 

nalu

Confirmed ProfiForex Representative
Sep 3, 2014
59
1
17
I manage my capital by reducing my leverage as low as possible since am still learn more about how to beat the forex market.
 
Nov 4, 2014
17
3
12
To manage your capital it's the personal matters of you ,you can invest on the trading business with our ready cash and if you have no money then you conversation on the forum and earning the bonus and you can be invest it to you trading account . . .
 

inggo

Banned
Jan 13, 2012
498
12
59
Philippinese
come to think of it, im not good at managing my capital but i do keep logs for it, at time i need the cash so i make a withdrawal but deposit whenever i end up with extra money. and so on. its not ideal and maybe considered bad by some but thats what going on on my end LOL
 

mantis27

Trader
Jan 2, 2015
1
0
7
USA
Risk per trade?

If you look up on google - how much should I risk per trade - the general consensus is about 2% per trade. Because of the very high leverage offered in forex, few actually follow that rule.

The sneaky truth about why money management (risk management) has to do with randomness and the power of streaks. Randomness is more streaky than people tend to think, and the market is more random ( less predictable, more efficient) than novice traders assume it is. When a novice trader looks at the market, they do not tend to have a probabilistic outlook, rather they wish to be (and halfway expect to be) able to predict where the market will go on a very consistent basis.

My point is that even with a 50% win ratio ( coin flip ) there will be a losing streak of 5 approx. every 31 flips. If you are risking 5% per trade, that's a whopping ~23% of the account on a losing streak of just 5. So when you see people post about 5% or higher being a reasonable risk amount per trade, you can see why so many novice traders fail. Its not just the loss, but also the math in reverse. If a trader loses 23% of the account, they have to make ~30% to get back to break even!
 

triplet

Active Trader
Oct 7, 2014
101
4
27
Money management is a good way to manage risk in forex and knowing your choice of leverage by reducing risk in every trading decisions.
 

ESinvest

Newbie
Feb 12, 2015
31
0
2
I also follow my personal risk management plan: I don't risk more than 5-10% of my capital in my trades, I use high leverages and stop losses.
 

olivine

Trader
May 21, 2015
140
0
7
I made my plan too, I use less risk in trading. I have to manage trades within Low risky trading as 2% of my capital. I use stop loss and take profit to manage trades when I am not watching market. I avoid emotional trading too because it can mislead me to take high risks.
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
Not to split hairs, capital management and risk management are two different things entirely - one is on how to manage your capital, ensure that you have enough funds in your account for all eventualities and the other, is managing your risk.

When it comes to managing your risk, very few follow the two percent rule..but for all newbies, this is a must, for obvious reasons. You can increase this later on but to start off with, two percent is a good place to start..
 

koyl

Trader
May 25, 2015
71
2
7
Managing capital is one vital aspect of forex trading . Traders should not only focus on how to make profit . To manage your account you practice an effect risk and money management strategy.