Summary of Money Management and Trading Guidelines
Summary of Money Management and Trading Guidelines
The most important elements of money management and trading are the following
- Trade in the direction of the intermediate trend
- When there is an uptrend, buy the dips and for the downtrends sell on the bounces
- You need to let the profits run and cut your losses short
- Use stop losses to limit your losses
- You need to have a plan and never trade rashly
- Plan your work and work your plan
- Always use money management principles
- You need to diversify but remember that you don’t overdo it
- Employ at least the 3 to 1 reward to risk ratio
- When you are adding positions follow Each successive layer should be smaller than before
- Add only to winning positions
- Never add to losing positions
- Adjust stop loses to the breakeven point
