Today i will cover a Forex Money management strategy.
”Why You Should Have Multiple Trading Account Instead Of Single Account”
Normally Trader start trading with a single trading account where he practice/ trade his view over market. He buildup a good trading strategy but fact is even a solid trading strategy may not pay you the proper dividend all the time and then the problem arise. When a strategy misfire over and over again trader lose his confident on that strategy and start looking for new one. What happen then ? Trader went out of his normal plan/strategy which he build with proper caution and looking for new winning strategy within short period of time. When he find another strategy which can give his money he applies that strategy. This not the proper way of Forex Money Management and Trade management. What is the problem here ?
Trader applying 2 different strategy on same account.
Why this can be a problem ? Evey Forex Trading Strategy has a winning ratio and loosing ratio with Risk reward Ratio. So when a trade apply 2 different strategy with different winning and Risk reward ratio he took twice risk then previous trading strategy. There is a chance that both strategy could give him continuous winning stake as well as loosing. Winning gives confident and loosing drains them, so couple of loosing stake from both strategy will cause huge psychological problem for the trader and as a result trade end up loosing his account.
What is the solution ?
Keep multiple Trading Account.
Do not deposit all the money on the same account.
Deposit the money that you can afford to lose.
Different Account for different strategy.
If a trader keep multiple account he will get benefit out of it in a good solid way. Forex is a dynamic market and because of leverage one can double his account in every minute so as he can lose his account in one minute, just one mistake could lead his account to “ZERO”. Here multiple account can help him to recover his mistake. Another psychological benefit is trader don’t have to see his losses every time he open his account.
Different account for different strategy ? why is that ?
Maintaining different account for different strategy is a part of Forex Money management Strategy. This will give a trade lots of benefit on his trading. A trade might has 2/3 or even more trading strategy, if he maintain different account he will have the benefit of getting profit regularly from one of his account and he don’t need to worry about the loosing month of other account. Those loosing account will be recovered next month if proper Forex Money management Strategy used.
Having multiple account will give a trader a good solid stand to survive in Forex Market. Trader need to follow proper money management strategy.