If you want to become a better trader, this information is for you! Once you finish this short training you’ll learn more about money management.
First, what is money management?
You’ve probably heard this on our YouTube channel before. But how do we get these money management skills? What should we do? Regardless of how much money you have, money management is the willingness to control it, that balance!
It also means squeezing out losses. This means reducing them. Try to have as few losses as you can. On this way you will not lose so much money and you will have some control over your emotions. That is money management, controlling your available money. Balance your losses and increase your profits. As simple as that! Nice, right?
5 of the most common mistakes in money management!
We will talk about the 5 biggest mistakes that people make. And that’s the reason why they do not have money management skills.
– The first mistake is to invest in what you don’t have. This means going with siblings, friends, or the bank to ask for a loan and thus be able to invest. Don’t invest money if you don’t have it.
– The second mistake is to invest in recommendations. It’s like when people tell you “have you seen bitcoin, it has been rising in price”. And what you do is invest all your money and when you see the following week bitcoin drops in price. So, don’t make this mistake.
– The third mistake is to bet all your money. For example, you go to Las Vegas, bet all your money, and lose it. The same is with Binary Options and Forex. You may win today, but tomorrow you may lose everything. You must find a way to make everything more profitable and thus have a stable income.
– The fourth mistake in money management is that people do this. For example, they have $100 and then they make $300. So, they come and spend $250, and they only keep $50. So, try to be patient unless you really need that money to survive. Like food for your family or an emergency, keep your money and grow your account up to 10 times more.
– Error number five is not using demo accounts. Most brokers have demo accounts. This will help you practice before you can invest real money. Practice first on demo accounts!
5 top tips you should know
Now we will give you 5 powerful tips that will help you gain money management skills over time!
– Tip number one, invest only what you are allowed to lose, it sounds harsh, but it is the truth. For example, you have 10 dollars, and you have to buy food, so you will be willing to give that 10 dollars to get what you want. The same goes for online trading.
– Tip number 2 is that you invest only 5% or 10% of your balance in each operation. Many people invest 20% or a little more in each trade. And I understand if you feel safe because you are winning this. Well, just see that it works and that you have at least 80% accuracy. In this way, you will be doing good money management.
– Tip number three is to reinvest 80% of your earnings. Do not do it with 100% as you will be wasting all your earnings.
– Tip number four is not to place more than 5 trades a day. I know this is very tempting for you in trading, so if you don’t control your emotions in this part you will be very affected.
– Tip number five goes hand in hand with the previous one. If you lose 2 positions, there is no way that it will be profitable. So, if you lose 2 times or more stop and don’t trade anymore.
These tips are very powerful, and we are 100% sure that they will help both for online trading and for your life. Having control of yourself is what you will need to have very good money management.
Emotions in trading!
Now we want to talk to you about the emotions you are going to get. The right emotion means that you are not in control of yourself for some reason. You say, “I want to invest more than I have.” You lend the money and go with even more emotions. You are excited, you feel over-motivated.
When you feel motivated you feel very confident, that you can even say “I am going to make millions of dollars by the end of the month”. You have to be realistic; these are emotions. We will talk about five emotions that you are going to have to control.
– The first one making some big deposits with no knowledge. That means you didn’t educate yourself, you didn’t read enough.
– The second emotion presented and that leads you to ruin is that you feel motivated or on the contrary that you feel fear. What you will have to do is learn from your mistakes and most importantly, never give up!
– Number three by not practicing with demo accounts and jumping to real accounts you do not have control of emotions, such as placing larger trades or placing more trades than the account. What you will only do is lose the money permanently.
– The fourth emotion has to do with when you are winning. Remember that you have to operate only with a maximum of 10% of your balance. What happens if you place the first trades with 10% and then you continue to place trades with 20%? So, here it will be more expensive to recover your losses.
– Number five is what is known as negativity which is equal to hate. So, you start hating the only successful source, you let negativity control you and it only makes you a hater. And then what you do is only speak ill of a person or say that some platform or market is useless, which is not good.
Now we will give you 5 more unique tips that will help you a lot.
– Get education! No matter if it’s the BLW one, you can get education for free online with articles, videos, etc.
– The second advice would be to follow the instructions. It will be useless to get the education and not follow the instructions, you will only be wasting your time.
– Tip number three is to practice as much as possible, never stop practicing. If you practice every day you will become a professional.
– Tip number four focuses on one strategy, specifically stick to one strategy. With 2 or 3 strategies you will only waste your time and money.
– The fifth and most important piece of advice is to help others! When you help others to grow, you learn yourself. This is being a successful person!
Where to get education?
You will have to be very careful as there are many places out there that offer education for thousands of dollars in exchange.
The academy that Cristian created is a place where you can learn everything you need to know for FREE. The BLW Trading Academy covers the basics of Binary Options and Forex. You’ll learn lots and then you’ll be able to start making money: https://blwtradingacademy.com/
Conclusion about money management!
Finally we can tell you that the most important thing is that you take education and that you know how to control your emotions very well. If you want to have education for free, do not miss the opportunity to join our Instagram account: @blwonlinetrading, and visit Cristian’s YouTube channel. This is something very valuable that you will not be able to find anywhere else. We hope that the information in this article has been very helpful to you and that you finish training as a professional.