Even in this unfavourable scenario, this simple
money management rule keeps you afloat: you'll end up losing only half of your account.
By establishing
your money management rules before you enter into a trade, you remove the emotional aspect of trading decisions and cut short your losses at a predetermined level.
If your using the 2 %
money management rule, this article may put that theory into question, which is the point... to make you think about it from all angles and perspectives.
This allows me to use smaller stops to keep within
my money management rules and also to get experience quickly.
It will allow them to follow
their money management rules easier.
To make the exercise even more effective, reward yourself at the end of each month if you followed through with using the poker chips or Monopoly money without breaking
your money management rules.
The bigger issue however comes into play are
the money management rules and even more common is our own fears & greed.