Money Management and Building Your System

Money Management and Building Your System

The final, and by far one of the most important factors to your success is money management (sometimes also referred to as position-sizing).

The final, and by far one of the most important factors to your success is money management (sometimes also referred to as position-sizing). To illustrate just how important it is to your final results, there has actually been a mathematical study which confirms that even completely random entries, based upon a coin toss and yielding only a 35% “win” ratio, can produce steady profits when combined with proper money management formulas.

As a matter of fact, to break it down by level of importance and influence, it can
be said that money management accounts for up to 50% of the final result.
Approximately 40% can be attributed to psychology, 8% to exits (including
targets, stops, and position management), which leaves 2% for entries – at best.

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Andrei Knight is a highly sought-after speaker and coachfor professional traders and individual investors alike, and holds international certifications as both an NLP Practitioner, and a Professional Life Coach. He is the author of "Trading Forex for a Living", and has made frequent... More

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