What Money Management rules you follow

How important is MONEY MANAGEMENT for you ?

  • Money Management is the most important part of trading.

    Votes: 31 79.5%
  • It is good but it is not that important.

    Votes: 2 5.1%
  • I think it is important but never followed any.

    Votes: 5 12.8%
  • I think it is important but I could find a plan for me.

    Votes: 3 7.7%
  • It is completely useless in trading.

    Votes: 1 2.6%

  • Total voters
    39
  • Poll closed .
#21
Good old Alexander Elder gives these if I remember correctly:

(i) Do not risk more than 2% of equity on a single trade

(ii) Do not risk more than 6% of equity at any given time. In other words you can take 3 trades as per above. To take the fourth trade, you must exit one of the three trades - either in profit or loss.

(iii) If you are down 6% at any time, stop trading for that calendar month.
 
#22
Good old Alexander Elder gives these if I remember correctly:

(i) Do not risk more than 2% of equity on a single trade

(ii) Do not risk more than 6% of equity at any given time. In other words you can take 3 trades as per above. To take the fourth trade, you must exit one of the three trades - either in profit or loss.

(iii) If you are down 6% at any time, stop trading for that calendar month.
I completely agree with the 1st and 3rd point. I have set the same rule for me too.
 
#23
I find the max loss I can tolerate per trade. Say, it's Rs. 10,000. Then, I calculate how much capital is required to suffer a loss of Rs. 10,000 if I put a stop loss of 2% ? It's 5 lakhs in this case.

Once I find the answer, I delegate the capital on that trade.

So, I might have 20 Lakhs to deploy in one day but I will only deploy 5 lakhs if my risk-taking capacity is Rs. 10,000.

That's like my most basic money management rule.
 
#24
Money Management is like a make or break kind of a thing that impact the trader’s longevity the most. Poor money management may cause unforced errors even if you are a technically skilled trader. For me what’s important is that i avoid vengeance trading. Never place a trade solely to make up for another trade that may result in account blow ups.
 
#25
Money Management is like a make or break kind of a thing that impact the trader’s longevity the most. Poor money management may cause unforced errors even if you are a technically skilled trader. For me what’s important is that i avoid vengeance trading. Never place a trade solely to make up for another trade that may result in account blow ups.
What other measures do you take to ensure money management? Please suggest.
 
#26
My monry management rules I hope you mean rules that we make on our own and follow so that we can manage our money better. In that case my first and very important rule is that I should never risk more than I can afford to lose. We all understand the importance of this rule because some people trade with monwy that ies very important to them and losing that money may mean hell for their lives.
 
#27
The best money management rule you can follow is that you should never go all in. You should always be sure that with the money you put in it, tf it is lost you still have some money which you can use to get back what you have lost but at a normal pace without any rash decisions.
 

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