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Money Management Calculator - A Powerful Tool for Trading

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This Money Management calculator is specifically designed to make it easier for forex traders to make trading plans, analyze trading results, and get the best lot size.

To use this Money Management calculator, you just need to enter the required data in the fields provided below:

 

Money Management Calculator




From the calculation results, you can conclude:

  1. SL (Pips): The recomended Stop Loss based on your rules.
  2. Last: The change in your equity (in dollars and percentages).
  3. Trade Target: The recomended target based on previous trading data and predetermined Money Management rules.
  4. Stop Trade: The maximum loss on the next trading position.
  5. Number of Lots/Position: How many lots per position should be in the next trades, based on the Money Management rules that you have set.



FAQ

What is money management?

Money management in forex trading refers to the ways you allocate your capital and risk in order to attain profits. Without having a proper money management, you could lose out all of your capital in a short time. Therefore, having a reliable system for money management is a must.

What are the five principles of money management?

  1. Manage risk consistently.
  2. Withdraw profit regularly.
  3. Avoid moving the stop loss.
  4. Don't aim too high.
  5. Know the right time to modify risk/reward ratio.

 

What are the 3 basic steps to better money management?

  1. Understand your odds.
  2. Know your risk tolerance.
  3. Adjust the risk management based on your tolerance and the market condition.

 

What are the types of money management?

  1. Fixed fractional position sizing, basically The amount of risk per transaction that is based on the percentage of our capital or account balance.
  2. The lot size per trade, refers to the method of setting the volume trading based on the ideal risk for each transaction. By using this position sizing, the amount of risk would remain the same regardless of the stop loss level (risk in pip) that we set.
  3. Risk/reward ratio, a comparison between the risk (stop loss) and the profit target (reward), to ensure positive profitability in the long-term.
  4. Volatility stop, it uses volatility instead of price action to set the risk.
  5. Mind management, a way to control your emotion during the trading process. Without a good mind management, there will be no reliable implementation of money management.

 

Setting up all trading needs correctly before using a real account is one of the keys to a trader's success.

Additional FAQ

Extreme price swings are dangerous, but good money management could counter it. Good money management also enables you to minimize your losses if the unexpected happens. In news trading, good money management is a requirement. If you cannot manage your funds, then you would do better not to trade the news.

Continue Reading at 3 Pointers For Forex News Trading

Ignoring money management in trading can lead to disastrous consequences for traders. Iif traders ignore money management, they risk making emotional trading decisions and overexposing their accounts to the market. This can lead to a rapid depletion of their investment capital and ultimately wipe out their account. Even if traders have a profitable trading system, ignoring money management can quickly lead to failure.

Continue Reading at Money Management In Forex Trading

Yes, money management is a crucial part of trading plan. It is very recommended that you choose one money management, be it the two percent rule, five percent rule, martingale, anti-martingale, etc.

Continue Reading at Planning Forex Trading: Why You Need Trading Plan And How To Make It

 The first method is by taking many small stops frequently and gaining profits from a few winning trades. Traders who practice this method experience many cases of minor psychological pain in exchange for a few major moments of joy.

The second one is by taking in large stops infrequently and gaining many small profits. With large stops, it is pretty common to lose weeks or even months' worth of profits in one trade or two. This method gives traders many minor moments of joy, but they have to endure severe psychological blows.

Continue Reading at Optimizing Money Management in Forex Trading

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