As traders we should understand and practice good Money
Management techniques. These are not only essential to our trading success but also ensure longevity within our chosen career. Quite often
we find traders who are caught up in their success and start to change
the lot sizes of their particular trades and find themselves outside the
scope of their Trading Plan.
We emphasise rigorous testing of our trading methodology
to provide statistical data on each market and timeframe we choose to
trade. This ensures that we have the knowledge to position ourselves
correctly in the markets and within the tolerances of our account size.
If however, we choose to start changing the lot sizes in any given
trading session then we are essentially making our prior statistical
data redundant.
We will not be able to assess our performance as easily
as well as engender a feeling of distrust when placing future trades.
Our confidence as a professional trader will diminish and could
ultimately lead to the complete erosion of our account. It is therefore
essential that we remain consistent in our trading and use only the lot
size determined not only by our account size; but also the size that was
used throughout the strategy testing phase. Once the account has grown
over a pre-determined period of time then it is possible to change the
lots size in accordance with the growth that the account has achieved.
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