Below you will find a great video by Chris from http://thespreadtrader.wordpress.com/ which has some tips on money management. Chris is one of my students and bought Making Money From Financial Spread Trading. My experience is that most using Financial Spread Betting or other forms of trading don’t spend enough time on a simple Money Management plan. Often those with smaller accounts don’t bother and their goal is to make as much money as possible and go all in one or two bets and I don’t need to tell you what normally happens.
Many books have been written on Money Management with complicated formulas. The key should be that no one trade should ever cause you so much damage financially or emotionally that you cannot continue. How every sure you are the XYZ is going to rocket, only a percentage of your trading bank should be risked.
“However “smart” we think we are in trading and investing we are dealing with unknowns, what is known and what we can control is how much we decide to risk on each trade, and that is what you should be spending more time on. It’s not all about knowing when to buy and sell all systems can go through bad runs and that’s when you money management really saves you.”
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