Forex Money Management from a Roulette System Gambler

As a professional roulette system gambler turned forex trader, I can tell you that proper money management is the most important thing to comprehend. New traders can avoid the costly mistakes that so many of us make starting out. Some often lose their investment in it's entirety on their very first trade.  The most important factor in money management is psychology. Although it's difficult, it is very important to not allow yourself to get emotional over a trade. Emotions are an obstacle to proper trading.  Most people make their trading decisions based on their emotions, and this is the reason why most traders lose money. 

This one simple secret helped me produce a consistent income playing my winning system for roulette despite the casino having the mathematical edge. You see, with the right money management techniques, you can still come out a winner even if the odds are stacked against you.  Money management is just as important to the forex trader as it is the roulette system gambler.

As a forex trader, you should be mindful of your risk and the leverage involved. Two percent of my account is the most I will ever risk on a single trade. Some say 10 percent, but from my experience, it's much harder dealing with your emotions at this level.  Keeping your emotions in check is much easier on a higher number of diversified trades with a risk of less than 2 percent each.  Even with large fluctuations, you'll still be able to stand straight. And if the worst happens, you'll still be alive to trade another day. So prepare yourself mentally for a bad trade, because they all won't be winners.

Keep your reward to risk ratio at a high level.  This means cut your losses quick, but don't be one to take a small profit too early.  Let your winners run further than you do your losers. Most people are too slow to take a loss and too quick to take a profit.  This type of money management is the recipe for losing. This is true for both the roulette system gambler and the forex trader.

Always keep track of what is working and what is not.  This means keeping a written record of each and every trade.  If you don't, you'll be driving blind. Those who don't record their experiences are doomed to repeat them.  Referring to your trading journal helps you avoid the costly mistakes of the past and helps with your continued improvement. Do more of what works and less of what doesn't. 

And finally, always practice your strategy first before playing for real money.  This was true for my roulette system strategy as well as my forex trading strategies. Virtually all brokers now offer a free demo account for practicing your techniques.  This is always a good practice before employing any strategy.