This page is about a far to little discussed part of trading: Money/Risk Management.
I am not talking about someone managing your money, I am talking about using Money Management in your trading plan to determine your tolerance for risk.
Hopefully this will give some new traders out there something I never had the benefit of being told when I first joined these shark filled waters known as the Foreign Exchange.
Baby Steps to Finding out your Tolerance for Risk:
Open a forex demo micro account that trades .01 lots.
Create a starting balance of $100
Learn to trade using 1% as your model for risk. This will help assure you dont take too large a loss all at once. On a micro account .01 lots will equal 1cent per pip, so 100 pips is 1 dollar or 1% of the balance.
Some might say or ask why bother with 100 dollars, it is simple really: this a number we can easily wrap our psyche around.
The chances of getting a Margin Call using these rules is greatly reduced, but not eliminated. Trading involves a great deal of risk and should only be done in demo until you have the risk capital to afford to lose all of your deposit.