Money managment - why is it important?

Anyone who has lived at least a couple of trading days in front of the monitors can understand why it is necessary to have a money management that protects us. After a day of heavy loss, every trader sets a lot of rules to respect and good intentions because this does not happen again but which he can hardly respect when he finds himself again in a complicated and loss situation.

What are the main mistakes that repeat themselves?

1. Average losing positions by increasing contracts: if when we win we do it with 1 and when we lose we do it with 10, obviously the balance can only be negative, which is why the first thing you can do with our money management is to fix the maximum number of contracts that can be opened and in which time slot.
2. Over trading, click even when there is no evidence: to avoid this, money management allows of setting a maximum number of operations that can be done during the day.
3. Desire for revenge towards the market, also called revenge trading: although they have accused themselves of losses, which most likely indicate the fact that the market is being analyzed incorrectly on that day, the desire to recover immediately triggers without waiting for clearer situations and with a greater advantage and that is why on the platform there is the possibility of setting a maximum drawdown for the day and also a partial drawdown, the latter of which prevents us from operating for several minutes, giving us the possibility to reset mentally and psychologically.
4. Be profitable and begin to feel invincible and click at every slightest evidence, going to erode the gain of the day. Furthermore, standing in front of the monitors the concentration decreases more and more with the passage of time; in the platform it is therefore possible to add a maximum daily run-up which inhibits trading once a certain profit has been reached.
5. To let a loss run with the hope that it will come back: if our trading plan foresees a certain daily loss, it would be wrong to "play it" all in a single trade and therefore on the platform it is also possible to set a maximum loss for a single operation.

We put below only a small screenshot of the options present on the Money management as the technical explanation of each item is present in the video tutorial within the personal area of ​​the site: