Sound Money Management takes the Emotions out of your Trading
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Thread: Sound Money Management takes the Emotions out of your Trading

  1. #1
    We frequently ask why many newbies seem to do the best they can to shed as much cash as possible in virtually no time. We all were newbies before and so was . The main reason I burned my hard earned actual work cash with my very first accounts was, well, I attempted to create as much cash as possible... in no time as well.

    Always know precisely how much money will be lost (or earned) using a transaction that you earn. With the very first accounts I never knew really. I was excited of making lots of cash if the market just moves the way newbie Peter believed it would.

    When it didnt I saw the minus growing and developing, panicking with each additinal red pip coming. When a position stopped out and one quater of my account was gone I sought revenge! ... and lost again.

    If you lose a large quantity of your account to get one trade (or win, it doesnt matter), you'll become very emotional about. Either seeking revenge or to create even mooore.

    So always know how much money you are going to lose if a trade stops out and always make sure that if it falls, it won't matter because it isn't going to touch over 2.5 to 5% of your account. Otherwise you'll freak out, trust me. With cash management, even when the first 10 transactions fail you will still have sufficient equity left to learn from your failures to adjust your egy.

    Should you risk too much per trade, trust me you'll freak the hell out when the market goes the other way. And then you're in a spiral of emotions that isn't going to make one of these sustainable traders that constantly reserve profits.

    I hope this helps some of you as I heard this lesson quite late. I always thought money management would be soely about chances and maths when it is in fact about trading peacefully, professionally, and, profitably at the end! So be careful, develop your egy and forget about getting rich fast. Making some safe additional cash each month is awesome too!

  2. #2
    On the risk, it depends upon the trader but anything above 3% isn't a fantastic call, particularly if the trader is a newbie. .And yeah, still remember the burns I have together with my first two accounts..been there, shared the distress with each new trader on the block. I figure , in retrospective, I should have chosen for learning to walk before trying to run. .

  3. #3
    For newbies, Adhere to 1% Maximum per trade and 3% to the total number of trades on

  4. #4
    Yeah, risk management is a must and also for the newbies, opt for small accounts, very low leverage.

  5. #5
    Regardless of what risk management we employ in our trading, emotions will ALWAYS be there. The SECRET is, we ought to have an ABSOLUTE control of our emotions.

    We're people, not robots. Our understanding is that we did something wrong if we didn't get what we desire. However, because new traders, you need to accept that people do not and cannot control the market, so if we do not understand what we needed, it does not mean we didn't do it right, its is.

    When I first started, the most difficult part is that the emotions bottled up out of stage A (entering a trade) to point B (closing a trade). Entering a trade was simple, however when I was in a trade along with the price shing and my feelings are hanging in, should I close now or should I wait?

    And of course, risk management is essential, but it does not take the emotions out of trading, it helps controlling our emotions.

    Just my two cents.

  6. #6
    We cannot completely remove emotions as we are human beings.

    In accore with my past experience trading as per a egy will remove emotions into the some degree.

  7. #7
    No one's going to have the ability to eliminate all the emoticons from the drama and if we could do that, suppose we may as well stand in for artificial intelligence. .
    Moving on, when it comes to trading and emotions, you need to learn how to keep it under control and it's easier said and done, along with a million other similar cliches but that is what it comes to. .

  8. #8
    Emotions cannot be ended it may simply be controls because emotions are normal and we must trade with patience and with great trading plan and egies. Appropriate plan and egies helps the trader to control their emotions while trading.

  9. #9
    Successful Trading Strategy= 60% Plogy, 30% POSITION SIZING or MM, 10% Trading system- Van Tharp

  10. #10
    Fantastic post Peter!
    My take on this. When you are feeling too emotional, don't exchange... Then you can't make right decisions... Only enter all transactions, when you feel cool. When you are feeling like a robot. . That saved me a lot of cash...

    Just for fun watch this:
    Trading In The Zone EFT Tapping Technique:

    I gathered links for some completely free plogy interviews and tutorials with traders. Watching self-improvement tutorials, helps a lot to take care of your emotions:

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