Series: Money Management
How to protect your account and survive the bad streaks: risk per trade, leverage, risk-reward, stop-loss and drawdown, explained with worked examples.
What is a managed account (PAMM/MAM)?
A managed account delegates your trading to a manager who runs a pooled fund; profits and losses are shared pro-rata by each investor's capital. The risk stays yours.
What is copy trading and how does it work?
Copy trading automatically mirrors another trader's trades in your account. You keep control of your capital, but the risk — and the losses — stay yours.
Why does it matter that your broker or manager is regulated?
A regulated broker or manager is supervised by a recognized authority that protects client funds and gives you recourse against fraud. It doesn't guarantee profits, but it does guarantee protection.
What is a funded trading account and how does it work?
A funded trading account lets you trade a prop firm's capital in exchange for a share of the profits, after passing an evaluation with strict risk rules. It isn't free money — it's a money-management exam.
Should you let someone else trade your account?
You can delegate your capital through managed accounts, copy trading, or account access, but the risk stays yours. The key isn't who wins most, but who you can verify.
The lie that costs beginner traders the most money
The most expensive myth in trading is believing a perfect strategy exists that always wins. But strategy is only 30% — the other 70% is money management and discipline.
How do you calculate your position size?
To calculate your position size, first determine your maximum acceptable monetary [risk per trade](/en/how-much-to-risk-per-trade) (e.g., 1-2% of your account). Then, divide this…
What is a pip and how do you calculate pip value?
A pip (percentage in point) is the smallest standardized unit of price movement in a currency pair, typically the fourth decimal place (or second for JPY pairs). Calculating pip…
How do you calculate profit and loss on a forex trade?
To calculate profit or loss, first determine your trade's pip value in the quote currency. Then, multiply this pip value by the number of pips gained or lost. Finally, convert…
How do you calculate the margin on a forex trade?
Margin is the collateral held by your broker to keep a position open, calculated by dividing the trade's notional value by your account's [leverage](/en/what-is-leverage-in-forex)…
How much should you risk per trade?
To safeguard your capital and ensure long-term survival in the forex market, never risk more than 1% of your total trading account balance on any single trade. This disciplined…
What is leverage in forex?
Leverage in forex allows traders to control a much larger position in the market with a relatively small amount of their own capital, essentially borrowing funds from their…
What is the risk-reward ratio?
The risk-reward (R:R) ratio is a crucial metric comparing your potential profit to your potential loss on any given trade. Expressed as X:1, where '1' represents your defined risk…
Where should you place your stop-loss?
Your stop-loss should be strategically placed at a logical price point where your initial trading premise is invalidated, typically just beyond a key technical support or…
What is drawdown in trading?
Drawdown represents the peak-to-trough decline in a trading account over a specific period, measuring the percentage loss from its highest equity point to its lowest before a new…
Position Sizing for Volatile Markets: The ATR Method Most Traders Skip
Most traders obsess over entries and ignore the decision that controls risk: position size. How to size to volatility with the ATR method — not to hope.
Money Management: The Skill That Keeps Traders in the Game
Survival in trading comes from how you manage risk, not from how often you predict the market correctly.
