On any business there is always a target goals. What it's mean?
Let's figure it out. When you have $10 capital, how much is your ideal target for gaining profit? Look now for bank interest. How much most biggest bank interest in the world? Let say it is 10% a month (very rare for bank interest).
Then look at the real business trade compare to capital start. When you buy some thing to sell, let say a box of candy, 1 box price is $10. So you can sell using your logic in about $12 up to $13. That is one time trade. Make it a day trade for 1 box of candy. Means that you got $2 up to $3 a day. Then make it a target $3 per day.
For the mean result, you have to do a target of 10% profit per day ($10 capital with $1 daily profit). That is much much more than biggest bank interest, right? But it still possible and reasonable.
So now we can figure out the money management. In business and trading industrial, money management (for me myself) is not managing my money, but managing my target profit. If I want to gain more daily profit, then I have to begin with more capital.
Very simple formula:
When I have $10, I CAN GET $1 daily.
When I gave $1000, I CAN GET $100 daily, and that would be ($100 x 25 working days) = $2.500 per month.
With my version of money management, the key is:
"I have to STOP any trade when I got 10% profit in one day".
Relating to the Forex trade is:
If you have $10 starting capital, use volume 0.01 LOT and stop trade when you got $1 in the day. Need more profit? Raise your capital. I.e. $1000 you can use volume 1 LOT and get $100 a day.
Try it! I believe you will be rich!
Warm regards,
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