Forex Money Management Plan

The best way to ensure you are staying on track with your money management strategies is to create a clear rule set and money management plan.

This money management plan should include;

#1: Calculate Your Acceptable Risk Per Trade

There are two common methods to working out how much you want to risk per trade.

The first is the fixed percentage method. With this method, you decide how many percent of your account you want to risk per trade, for example, 2%, and you continue to risk 2% as your account gets bigger or smaller.

The second method is the fixed money method. With this method, instead of using a percentage of your account, you risk the same amount of money on each trade. For example, you might have a $5,000 account and choose to risk $250 on each trade.