Money Management

The term money management means how much money a trader is risking and trying to make on a trade.

This is also called Position sizing. Money management is the most important aspect of any Forex Trader’s trading method as it can mean the difference between making 100 winning trades that make $10000 and make 10 losing trades that loser you $11,000.  Smart Money management strategies are conceived to help a trader maximize gains and minimize losses, both in terms of number and volume.

This ties closely into technical analysis methods of finding entries and exits; smart money management involves setting exit points that are logical and give you a higher probability of success.