Zantrio.com Trading Tip | Money Management

The concept of money management is one that a lot of traders will simply skip over. This is one of the less sexy parts of trading, but by practicing it, you will find that even bad trading days can be overcome in the end. While there are a lot of systems to deal with money management, by far the clearest will be to risk a certain percentage of the account per trade. For example, most professionals will not risk more than 1% of their trading capital on any one particular position in the markets. While this doesn't sound like much, that is exactly the point.

If you are risking only 1% on a position, even if you lose, it is relatively harmless in the big scheme of things. You would have to suffer through a colossal string of losses in order to have this kind of money management system blow up in your face and destroy your account.

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