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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