Forex Money Management
Forex money management is not a favorite topic of many traders to think about, however your long term sucess and viability in the market depends on it. Without it you are running the risk of a few bad trades wrecking your account.
It's real quite simple. To avoid risking too much on a trade you should determine your risk before entering the trade and stick to that risk. I recommend risking 2-3% of your account balance per trade. This doesn't mean you are limited to making 2-3%, it means if you trade is wrong, that is the most your account will be reduced by.
insert hypthetical trader 2-3 %
Failure to set a risk amount, you run the risk of a few real bad trades negating many smaller good trades.