Trading Methodology
ForexGen Money management referred to, as “risk management” is absolutely critical to successful
day trading on an ongoing basis. Many traders regard it as the single most important aspect
of trading. Indeed lack of proper money management is a major cause of failure among new traders.
Money management covers the allocation of funds to your trading, i.e. how you will allocate funds
to your trades, size of the trades, and the makeup of your portfolio and how you will diversify
between different investment types. The entry and exit points, stop loss management, risk
reward ratio – if you apply that, or profit to trade and your trading style.
For money management in ForexGen rules to be profitable to the trader, in my opinion entry as well as exit
levels are both important. Most so called gurus tend to put lot of stress on the exit (stops), which
I agree, but have to add that exit would be totally meaningless if the entry itself was not at a
right level. At a Trading seminar I went to some years ago, I recollect a “Trading Guru” telling
his audience – “ it is not entry which is important – it is exit” – I choose to differ. If the entry
price was not the best price, then you will have a quick exit, when your position is stopped out¬
Money management becomes key, after you have pulled the trigger, based on the entry price
which would be according to your trading system (this is covered separately under trading system
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