Simple Money Management Forex Technique

As a forex trader, you will always be in need of money management forex techniques. It is never easy to learn and search for best and most effective money management forex techniques or strategies. Most forex traders quit trading just because of insufficient guidance and lack of money management forex techniques. If you are in search of the money management forex technique, we have it here. We will never let you quit the forex field.

Here we will tell you a simple money management forex technique which you can easily learn and apply right away. This technique has three steps:

1. When entering any trade, you must decide that how much money you can afford to loss in the trade? It could be any amount of your capital, say 1% of your capital or 3% of your capital. If you have a capital of $18000. Then with 2% of loss, total amount will be $360.

2. Decide with the stop loss size of the trade. This is the price of pips away from entry point. You can set any stop loss, like stop loss of 18 pips. Stop loss for 18 pips is $180 approximately.

3. In the last step you will have to decide that how many contacts you will be purchasing. It can be calculated by dividing risk amount by stop loss.

360/180 = 2

Hence, you can purchase 2 contacts.

This is the simplest money management forex technique used by maximum number of forex traders. It is very easy and can be applied very conveniently.