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So, let's begin....
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What is Money Management?
(Money + Management) Money Management is an art used by experts for the wise use of money in investing, budgeting & more.
Management is the most important tool in any field whether you are in the field of Trading or Wrestling. Management is a must.
Importance of Money Management
Recommended: Read Olymp Trade Winning Strategy
“When money realizes that it is in good hands, it wants to stay and multiply in those hands.”
― Idowu Koyenikan
The above quote by Idowu Koyenikan is 100% accurate and perfect.
I am personally Trading for like 2.9 years and I am personally following Money Management very strictly like a Bible. Which helps me to gain more and more profits.
Most of the students ask me only one question.
Sir..which is your favourite indicator?
My favourite reply is: It doesn’t matter which strategy or indicator you are using Triple RSI or Stochastic etc.
But if you are not using a proper money management strategy you are going lose everything no matter what.
So, that’s the power of Money Management.
So, In a nutshell the importance of Money Management is:
· To make More profit
· To make More profit
· To make More profit
· To make More profit
· To make More profit
· To make More profit
· …………………………………..That’s it!!
Olymp Trade Money Management Strategy | Risk Management
The First Strategy I want to share with you is The 30 Rule.
To make you understand more clearly. I will share with you a practical example.
Suppose. You have deposited $100 in Olymp Trade.
Now, The golden rule of the 30 Rule says: Don’t trade more than 1% of your account Total Value i.e $1. And don’t lose more than 3% of your account Total Value i.e $3. That’s it. Write this in your notebook.
Example: As, said above Suppose you have $100 (Total Value) in your account.
Now, as you are following The 30 Rule you won’t trade more than 1% of your account Total Value i.e $ 1. Plus If you lose 3% of your account Total Value i.e $3 you will leave trading for that day.
Now, It’s calculatation time…
Just calculate If you $100 in your account that means you can trade 100 times. In 10 rows (10 * 10 = 100 times ).
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First day Olymp Trade Money Management
Suppose the first day the market was really bad and you lost 1st trade, 2nd trade, 3rd trade = $3 loss and now the face value of your acc balance is $97.
And 2nd day and the third day was the same. Now your account value is 100 – 3 + 3 +3 = $91. Even after the three-day loss, your balance is still $91 which is great.
Now, day 4 market gets good and you got a 70% profit. Now your account balance would be $ 91 + (80% profit * 70% = 7 * .80 = 5.60 ) = $96.60.
Similarly, if you do the proper calculation. One day your account will reach $110 ( Most of the time it reaches within a week) and without any thought just withdraw that $10 and invest it in Recurring deposit or somewhere else. (Make money from Money ). That’s it.
Recommended: Read Olymp Trade Honest Review
Winding Up:
So, this is the end of this article I hope you have found this article helpful. I have worked really hard for you. So please do comment below.
For Best Results: Download My FREE E-BOOK – Guide To Make $15 per day From Olymptrade
Sorry for the bad writing but as the quotes says: It takes a lot of bad writing to get to a little good writing. :-)
Truman Capote
This article was all about Olymp Trade Money Management , Olymp Trade Risk Management, Olymp Trade Capital Management.