Money management
I tink that the money and portfolio management is the most important part of successful trading.
Believe that the management is everything for survivre in stock market over the years.
I believe in that.
Let’s define what is the money management:
Money management evaluates the risk and reward of a trade and determines the best use of investment money. It tells you how many shares to purchase and how much money to place at risk. It is the difference between great trading
performance and poor performance. It will make the difference between making money and going broke.Basically, money management tells you how many shares stock to trade.
Considerations of Money management: Some traders believe that they are managing their money by having money management stops, stop-losses and stop-profits. Such stops would get the trader out of a position when they lost a predetermined amount of money – say $1,000. However, this kind of stop does not tell you how much or how many so it really has nothing to do with money management.
Controlling risk by determining the amount of loss if you are stopped out is not the same as controlling risk through a money management model that determines the size of your position.There are numerous money management strategies that are available.