Money Management Parameters

Money Management Parameters
As I wrote in Getting Started in Currency Trading, there are three basic money
management parameters to be considered. Although they are important individually,
it is critical that they work together and aren’t contradictory with each
other or with your trader profile.
1. Trading capital.
2. Trade size.
3. Risk/reward (stop/profit objective).

Making Money Management Decisions 

0000000
These should all work in harmony with your trading profile. For example:
• Don’t position-trade if your trading capital is $500.
• Don’t trade 100,000 lots with $1,000 trading capital.
• If you are a scalper, don’t expect to set 5-pip stops and 50-pip objectives.