How Important is Money Management in Trading?

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How important is Money Management in Trading? Ali, trader and educator comments. PLEASE LIKE AND SHARE so we can bring you more! How about money management..."how important is it? How much do I risk on each trade? There are different ways to look at money management - how much of your account do you risk? On my day trading I don't risk more than 1% on any one trading while on my position trading I rarely risk more than 2%.

Are some of these extremely aggressive trading styles that preach big profits on trades sensible? Will they keep me in the market long? What's their money management strategy? Is it strong? They say I don't need much money to trade their style. They make big profits, but how consistently? Are they only saying this to me because I don't have much money? A lot of these companies are essentially promoting 'get rich quick' schemes so if you can make 10% but you had to risk 20% to make that gain - you only have to lose 5 times to lose your entire trading capital.

[ukspreadbetting]

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[oliverolonan]

The first thing a new trader should learn or the first subject in the trading curriculum if there's any is not technical analysis or fundamental analysis or trading strategies, it should be money management/risk management/position sizing. Next is Risk Reward Ratio. Last is the strategies & analyses.

Funny thing is that in reality, in the journey of trading, traders learn the strategies first, RRR second, & position sizing last. And Eureka! After this, they become wiser & if they continue the journey with their wisdom they become successful. Ali Brooks is right. He gained wisdom!

[nick]

I love this channel. thank you everyone who is working on this. this man is amazing.

[edgewrld]

this is the key the drawdown and based on it you can calculate your risk

[itslike]

It doesn't matter how much you risking in mathematics World. As long that you always doing it the same way it will always be 50/50 chance minus spread. But we have the advantage of experience knowing roughly which way the trade is going . The trader screws their account when they stop the trade when it is in profit . (Higher risk with small profit means high Win Rate but less reward ratio) . And when your risk is lower then take profit then your win rate is low but more profitable ) . The key here is to allow your trade to run and don't temper with it

[robertkacala]

You need to make more what bank can give you lets say minimum 5%...if you are able to make 5% or more in long term and not blow the account you are ready to be full time trader, later just make your account bigger (extra savings, job or other source of money maybe rich uncle ;) so you can risk less on each position and let it grow.

[mostlyinafrica]

Great video.... How do you calculate the drawdown?

[TIRapi]

Some questions I still have:
1. Is it a good idea to only have a small percentage (15-40%) of your total trading capital on your actual trading account? You can easily get high leverage accounts with very small margins. That way I could earn interest on the unused part of my capital.
2. What are ways to get funded as a profitable trader? Are there any platforms, websites or institutions, funding talented traders?
3. How, when & why do full-time traders withdraw their profits? once a year, every month, quarterly...
4. Why do successful traders reduce their risk per trade as they grow their accounts? Do they fear big numbers or what's the point in limiting their potential even though they are consistently profitable?