April 2019
Beginner
368 pages
10h 17m
English
Content preview from Day Trading For Dummies, 4th Edition
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Chapter 21
Ten Tested Money-Management Techniques
IN THIS CHAPTER
Using simple techniques to limit losses
Determining the right size to trade
Finding statistics to plan trades
Realizing the dangers of ignoring money management
The key to success in day trading is discipline. That starts with good money management: determining how much money you will trade, when you will cut your losses, and when you will walk away with money in your pocket. If you don’t manage your money, you won’t be trading long.
Here, you get an overview of the key money-management techniques that you should consider as well as one that is a very bad idea. Some of these techniques are simple; no calculation is required, and you can use them right away. Others involve a little workout with your calculator. A few of these techniques need your performance history to work, so you can’t use them right away, but you can experiment with them as you build your trade data. (And yes, this is one of the many reasons that traders should keep records of trading activity.)
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