Money management is something that is acquired with experience and during the time that you do with day trading. We are not talking about how much you invest or if you want to be rich or not. What we mean is that there are several things that you must control, such as your emotions, mainly that will lead to you losing money.
In this article, we will give you three tips especially for you to manage your money in the best way, both in Forex and Binary Options trading.
First money management tip don’t lend money!
The first piece of advice and it is something that many people do is to lend money. Like going to a bank and using your credit card, going with your friends, parents, etc. Asking for money you need to use to start trading.
For example, let’s say your parents lent you $500 you have a huge responsibility not to lose that money. If you do lose it, how are you going to pay it back? In this way, your emotions start to play with you. You start losing positions of %10 and then to want to recover, you double the next one to %20 and recover your losses. In this way, you will lose all the money.
So, do not borrow money, just save money. It would also be best if you practice as much as necessary so that when you put money in your real account you will become an expert.
Do not trade with more than 5%, another money management tip!
Tip number two is don’t trade with more than 5% of your balance. This is specifically for beginners. So, if you are new and don’t know how much money you have to invest in each trade you should go with 5% of your balance. No more than that, it could even be 2,3,4 and 5%. So, if you have $100 you will have to place $5 for each operation.
There is a different scenario where you will have to put a minimum of 10%, but it is when you only have a balance of $10. $10% is $1, but if you decide you can go with a lower percentage.
Do not withdraw your money!
Tip number three is something that doesn’t really happen that often, but it hits you when it starts to happen to you. And that’s when you withdraw your balance too quickly. What we mean by this is, let’s say you start with $100 and then you get $300 in profit. You’re all excited and you cash it all out and you’re left with $100 again!
There’s nothing wrong with that but if you’re really looking to make money you don’t need to do that . You must have a greater balance and thus the yields of each month will be greater. If in any case you need money, you can withdraw at least $100. But if it is not necessary, grow your account a little more. When your account has at least $3,000, withdraw $1,000 and start living your life as you really wanted.
We hope that these super tips will help you with your career! Follow them and you will have the success you have always dreamed of. Do not fall into any of these mistakes, hopefully, this information will be very helpful for you and your education process as a professional trader.