Programming this EA - page 3
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Good. I see risk management and money management as two separate different entities also.
Risk management is about assessing your risk, how much you want to lose to gain a certain profit.
It goes hand to hand with risk reward ratio.
Wealth can be accumulated real fast with proper risk management.
With proper risk management comes proper volume size for trade entries.
However, I don't use risk management anymore.
Why tell the broker and the banker, "Okay this is how much I am willing to risk or lose."
When it comes to money, they will be tempted to hunt and pressure you down to ultimately lose.
Thus, 95% of all traders will lose.
Money management, on the contrary, is completely different. It is no longer about risk but about maintainence.
How do you intend to keep your your profits and how to increase your bank roll budget overtime.
For example, do you stop trading all together if certain profit goal is met or loss becomes exceeded?
CONCLUSION:
Gamblers do use risk management and money management. But ultimately, most will be losers.
It is all the same in Forex as in gambling.
I sometimes wonder why people bother with risk management and money management especailly
when money managers (who are experienced with solid education) still managed to lose lots of money.
Yes, money managers using these very techniques lost huge amounts of money! Therefore, I question their
effectiveness.