Question
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How can we do the money management?
11 Answers
<p>Always buy when there is a good support and sell when there is a good resistance. In order to identify the support and resistance zones, you can take the help of various technical patterns, indicators, volume, delivery, etc.</p>
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<p>Entering the market at different levels and putting a fixed risk-reward ratio is a secret of managing the money effectively in trading.</p>
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<p>You can use equity stop, where the trader risks only a predetermined amount of their account on a single trade. A common metric is to risk 2% of the account on any given trade.</p>
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<p><br>I mostly prefer volatility stops. The idea is that in a high volatility environment, when prices traverse wide ranges, the trader needs to adapt to the present conditions and allow the position more room for risk to avoid being stopped out by intra-market noise. The opposite holds true for a low volatility environment, in which risk parameters would need to be compressed.</p>
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<p id="isPasted">If a trader decides to go for small gains and take regular, but large stops, the many small gains will more than offset the few big losses. On the other hand, if he chooses to go for big gains and take infrequent but large stops, the profits will outweigh the few big losses. </p><p>Beginners should only deposit what they can afford to trade into their trading accounts. If you hit your maximum acceptable loss per month, stop trading immediately. Your goal is to only risk capital that won't drastically change your life if you lose it. The money you need …</p>
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