Anti MC Trading with Correct Money Management
How to Deal with MC with Money Management
Margin cal traders can avoid. However, traders cannot
eliminate the risks that may arise due to MC. That's why traders need a
surefire way to deal with MC, namely by doing risk management and money
management.
If risk management helps a trader take action immediately
after a market movement occurs, then capital management is part of the trader's
trading plan. The thing that traders need to remember is that trading has a
high risk. Market movements are unpredictable. A fund or capital management strategy
that can help a trader avoid massive losses as a trader. The main key is how
traders can limit risk to a minimum. From there the trader can estimate the
number of transactions that can be made with this capital and the maximum risk
of loss that may arise.
In addition to limiting risk, traders can also set profit
targets. Make sure the profit target is not smaller than the risk allocation.
For example, the risk per transaction is 5%, then the trader's profit can be
pegged at 6% to 10%. The comparison of risk and potential return is often known
as the risk reward ratio.
Finally, make sure the trader uses a trading system that
they really master. This is important so that traders can measure the accuracy
of the trading system through a win loss ratio, or a comparison of profit and
loss transactions. Having good risk management will help traders take
appropriate responsive actions after observing market movements. While money
management helps traders control financial conditions in order to survive in the
forex trading business for the long term. Even if the trader suffers
consecutive losses, the trader can come back and make a profit again.
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