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Here's a little something I wrote out for a friend of mine, who had started investing and trading. It covers just the basics of Money Management, and is a starting place:
Money Management:
People will hear the words "Money management" and think "Oh, you mean how much to risk?" or "Only risk 2% of your account size" or, "Oh, you mean my stop / loss" order?
The truth is, those are all very small parts of what comprises Money Management. Proper Money management involves analyzing risk. But it should also look for growth. For your money, making you money. Money management is about managing your trades. But managing your individual trade, does not comprise all there is to know about money management.
I would say that Money Management is made up of:
Risk Analysis
Reward Analysis
Trade Management
Drawdown
Accuracy Rate
Performance Analysis
And those factors? Can be split up even further. . .
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