# The Best Money Making Strategies for 2018

Many investors think that defining their risk to 2-3% per trade and calculate the distance for the stop loss and the pip value in every trade is money management. This is an important part of a money management strategy, but there is a lot more in it…

So, how can we manage money correctly?

1) Fixed \$ Amount in draw downs

This money management strategy is helpful for recouping quickly from losses, the trader will trade a % of the account when successful but will trade a fixed amount when an unsuccessful trade hits:

e.g.

10.000\$ 2% risk = 200\$ RR= 2:1 GAIN= 400\$

10.400\$ 2% risk = 208\$ RR= 2:1 GAIN= 416\$

10.816\$ 2% risk = 216\$ RR= 2:1 LOSS= 216\$

10.600\$ FIXED A= 216\$ RR= 2:1 LOSS= 216\$

10.384\$ FIXED A= 216\$ RR= 2:1 GAIN= 432\$

10.816\$ 2% risk = 216\$ RR= 2:1 GAIN= 432\$

11.248\$ 2% risk = 224\$ and so on…

It takes you only one trade to recoup completely from two losses.

2) Compounding

Compounding is a very powerful long term money management strategy. Basically reinvesting the gains of each successful trade and avoid making withdrawals for a relatively long period of time will boost your account like you never imagined!

3) Segregated capitals

This concept allows a more aggressive trading approach.

The trader split his total trading capital in two, one for risk and one for safe.

The risk account is the 5% of the total trading capital, the rest 95% is in a separated safe account. The trader will only trade with the risk account (5% of total trading capital), but will risk 15-20% of the risk account. Each time he doubles the account he recalculates the 5% of the total invested capital and re-split the money equitably in the two accounts.

Implementing one of those Forex money management strategies or mix a few of them will allow you to maximize profits and minimize losses the best way possible.

“Pro Retail Trading (David & Nathan) is a group of professional full time traders committed to educate and empower traders from all walks of life, no matter their experience level.”

Discover The Exact Systems We Use To Exploit Institutional Order Flow And Make Consistent Profits Daily In Less Than 4 Hours of Work Per Day, Completely FREE At: [http://www.thebestforexsysteminfo.com/]

Article Source: http://EzineArticles.com/expert/Nathan_R_Murphy/797212

Article Source: http://EzineArticles.com/5491077