💼 Capital Management: The Secret to Staying in the Market

Many people think that success in forex comes from correctly predicting market movements, but the truth? Real success starts with capital management.

No matter how strong your strategy is, if you don’t have a plan for managing your money, one losing trade could kick you out of the market!

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✅ Why is capital management so important?

Because it protects you from significant losses.

It allows you to stay in the market for the long term.

It reduces the impact of emotions on your decisions.

It allows you to lose and continue, instead of collapsing after the first loss.

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📌 Key Rules of Capital Management:

1️⃣ Do not risk more than 1-2% of your account balance in a single trade.

This means if your account has $1000, the maximum loss in a trade should be only $10-20.

2️⃣ Use Stop Loss

You should not enter a trade without determining where you will exit.

3️⃣ Do not chase losses.

This means if you lost a trade, do not enter the next trade out of revenge.

4️⃣ Diversify your trades.

Do not put all your capital into one trade or one currency pair; spread the risks.

5️⃣ Calculate the risk versus reward.

Do not enter a trade unless the expected return is at least double the potential loss.