You’ve made the decision to trade forex and you’ve heard about all the benefits of doing so. The next step is choosing an online broker for your trading account. After you’ve chosen a forex broker, you’ll want to get some experience trading with virtual money before risking your own hard-earned cash.
In this guide, we review the aspects of Forex Money Management Software, advanced money management forex, Which software is best for forex, and forex money management strategies.
Forex Money Management Software
A Beginner’s Guide to Forex Money Management
Forex money management is a very important part of your trading strategy. It refers to how you allocate your capital, or how much risk you are willing to take with your trades. There are several different ways that traders can manage their money.
It is especially important for new traders because they do not have the experience or knowledge that more experienced investors have. This can lead to some bad decisions on their end, which could prove costly in the long run. One way that they can avoid this problem is by using forex money management software.
Money management works by limiting your losses during periods when the market goes against your position and maximizing profits during periods when it goes in your favor. It also helps prevent overtrading which could lead to increased stress levels for traders if done incorrectly because of all the work involved with managing multiple accounts at once instead of just one account!
How to Maximize Your Profits
- Take a look at the charts. Charts are your best friend when it comes to forex money management software. They’ll show you what’s going on with the market, and that’s important for knowing when to buy or sell.
- Look at trends. If a currency is trending down, then there’s no point in buying it because its price will continue to fall until it hits rock bottom (or until someone starts buying again). On the other hand, if it’s trending up and has been for some time, then chances are good that this trend won’t be changing any time soon—and if you’re able to get into that trade early enough, then you could make some serious profit off of it!
- Look at news stories and technical indicators together so they can help each other out: The news will tell us what might happen next while technical indicators give us clues about how an asset has performed lately based off past performance alone–and both these things matter when trying to predict future outcomes based off past performance alone–and both these things matter when trying as well as current market conditions.”
How to Manage Your Risk
Having a good money management strategy is one of the most important aspects of trading. It will help you avoid blowing up your account and ensure that you make steady profits over time.
The first step to developing a good money management strategy is knowing how to manage your risk. Risk is defined as the possibility that you might lose money on an investment or trade. The best way to minimize your risk when trading forex is:
- Don’t get greedy! This may seem obvious but it is one of the most common mistakes that traders make when deciding how much capital they want in their account based on their starting balance with a broker or what percentage of their total account value they are comfortable risking per trade. If someone has $5,000 in their trading account and decides they can afford 20% drawdown ($1,000), then that would mean risking $20 per trade (20%). What happens if this person only ends up winning half his trades? Then he’ll end up losing money instead of making any profits! Instead think about setting limits for yourself like 10%, 5%, 3% etc., depending on what rate you expect from winning trades (this will vary based on different brokers).
Moving Forward with Forex Trading Systems
The next step is to put your plans into action. You should start saving for some sort of goal, whether it be retirement or another long-term goal that you have in mind. Also, keep track of your trades so that you can see what’s working and what isn’t. If there are certain strategies that seem to be more profitable than others, then stick with those as much as possible!
If you’re having trouble deciding what kind of goals would work best for you, consider doing some research on the best investment strategies and their associated risks so that they don’t come back to bite you later down the road (or even worse). A little bit of knowledge goes a long way here – both when it comes time making investments and when determining how much risk should be taken by each investor based on their personal situation (elderly people may need less risk because they don’t have many years left before retirement; younger people might want higher returns if they’re planning on buying a house soon).
The most important thing you can do when trading forex is manage your money effectively.
The most important thing you can do when trading forex is manage your money effectively. This means that you need to know how much risk to take and when. If you don’t have a plan for managing your funds, then it won’t matter how many assets you have or how accurate your trading strategy is—you’ll end up losing all of it because of some bad decisions on the trade floor.
Money management is also important for new traders because if they start off with too much leverage, then their losses could be enough to discourage them from continuing their trading career or even scare them away from forex altogether! How can anyone possibly make money if they’re constantly losing?
For professional traders who already have experience in other markets such as stocks or commodities; there are still plenty of ways for them (and everyone else) to improve their skills when it comes down t o making better trades more often than not!
advanced money management forex
That is when I became obsessed with finding the right signal strategy for trading and concentrated all my efforts on finding the truth.
Everything changed when I found a trader who opened my eyes and mind to the world of trading and gave me a new lease of life. There are a lot of people who find trading complex and boring, but if you take the time to learn it, you will find that it is quite interesting.
What is Money Management in Forex?
Forex Money management strategy consists of important rules that help you maximize your profits or minimize your losses and increase your trading account. money management means the way you manage your money when you trade in the market. without a suitable money management strategy, you can’t become a profitable trader.
While it’s pretty easy to understand the benefits of these techniques, it happens that traders in Forex tend to neglect even basic money management rules and end up blowing their accounts.
Money management techniques ensure that the trader will be able to trade again no matter what happens.
In the article, we will show you a simple and proven management strategy that will help you profit and continue to grow as a forex trader.
Simple Forex Money Management Strategy
The trader that I had come across was trading a simple money management strategy that was quite common. He showed me two years of his equity curve, which identified when he was up and down on his balance and the point in time when he made a decision that changed his life. The result of that decision was an exponential solid upward curve, which fascinated me.
I couldn’t believe that his decision was so simple yet had made such a massive impact. It was embarrassing to learn that something so simple could be done, and I was frustrated with myself for not thinking along the same lines.
The decision he made was a self-agreement contract that he did with himself, which had the following details:
The result of his decision was astonishing because the trader managed to get over 85% winning days. The great thing was that in only 3 years, he managed to grow his account from 500 Euros to 6 digits, and that was after routine withdrawals were taken out!
Those aren’t just good numbers. They are stunning numbers! I couldn’t believe that someone could achieve growth that fasts, and it was only by staying humble.
This was a game-changing revelation for me, and I decided that I was going to do the same thing. Therefore, I decided to implement his strategy into my now trading, and I am going to share those results with you today.
The first thing I am going to reveal is that my own analysis went on a completely different path from the one that the trader took. That is because I kept on changing my analysis and repeatedly refined my entries, but I kept things simple by only taking the lower hanging fruits. Keeping things simple, meaning that the rewards presented at the end of the day to me were more than satisfactory.
One of the biggest mistakes that traders tend to make is that they set their goals too high up on the tree and don’t realize that by doing that, they are setting themselves up for failure.
We Trade Forex – Come trade with us!
Consistency by Being Humble
When you start your forex trading career, you will come across a lot of material that will teach you how to make money fast and how easily this career path is going to be. However, the one thing that you will not find in any sophisticated article or in the many books on trading is how you should target the lower-hanging fruits on the tree.
I learned that lesson from the trader, who taught me that by keeping things simple, you don’t complicate your own trading strategy or try to aim for too high a prize.
The most important thing that you must remember as a forex trader is that you must try to achieve consistency in the results. Now, this doesn’t mean consistently failing, but we are talking about achieving winning consistency here. I am assuming that every one that is involved in forex trading has a good grasp of basic math, and if you do the arithmetic, you will realize how powerful a money management strategy targeting the lower hanging fruits really is for trading.
To make my point and prove it to you, I will show you the results. We will be taking the same decisions that the trader had done and, in the end, come out with two possible outcomes. The first result would be that we have managed to gain 85% winning days. The second result will be that we have lost. So, this is what we are going to do with our trading:
I will be breaking down difficult terms as well so that anyone that isn’t familiar with forex trading can also properly understand what we are trying to achieve over here. For instance, when we talk about 15 pips for a forex major vehicle, it is approximately 18% to 10% from the daily range.
The complete zigzag path, which is based on the M15 timeframe, will show that it is only approximately 1% to 5% from the daily pips movement available.
Therefore, if you are confused about what low-hanging fruit is in forex trading, it is the achievement of 15 daily pips.
The graph below is for reference, where we are implementing our strategy, and remember that the end result we are going for is low-hanging fruit, which is 15 daily pips.
This graph shows the results of the past 12 months, where, using the strategy that we discussed above, we have managed to make over 35,000 Euros, which is an astounding 3500% growth! That is an incredible growth rate.
the graph below verifies and acknowledges that growth.
After you have applied the strategies, the growth chart that you are looking at should resemble this. Looking at the percentages, you will notice that the figures of 3500% growth are accurate.
The realized equity chart would resemble this:
This graph shows that when you have a long sequence of losing streaks, where you are only risking 1.5% value every day in trading.
Have you noticed how the graph chart never manages to reach the complete 100%?
Let’s say that the scenario has been exaggerated, but there is a constant risk, which means that you won’t manage to blow the account, and hence there is a potential to recover from this loss.
If you apply the theory, then by doing simple math and maintaining disciplined behavior in trading, you will find that long sequences of losing strikes can be recovered as well. That is because when you achieve exponential growth on consecutive winning days, you can overcome those losses.
Rewards for The Instant Generation
One of the main reasons why the current generation of forex traders fail to get winning results is because they want instant results and don’t want to sweat for rewards.
That was the thinking that I had as well when I dived into forex trading, not realizing that it was not the right strategy. The biggest revelation to me was that by keeping things simple and remaining humble about my expectations from the market, I managed to make amazing gains from the low-hanging fruits.
The sophisticated trading markets of today tend to confuse traders because they offer extremely high liquidity, and all the brokers will be offering you with leverage. However, what they don’t tell you is that the only way you will manage to find consistency in the market is if you manage to remain humble. There is a simple strategy at work here, and the best part is that everyone can take advantage of it.
“All you need to do is take your share of the pie fast, understand when you must end your daily, and leave for living your life.”
Over the course of my forex trading career, I must have met thousands of different traders, but almost all of them are looking for instant success, which means that they don’t keep things simple, as they are too focused on taking big risks to acquire bigger rewards.
That is why there is no reward for the instant generation because they aren’t willing to grind it out and take their losses on the chin. Too many traders give up at the first sign of trouble.
I will tell you from my own personal experience in forex trading that keeping things simple isn’t easy to reach by any stretch of the imagination because the market is so complex. However, once you manage to train yourself and start following your own checklist, you will start noticing that things are falling into place.
The secret to achieving success in forex trading is to keep things as simple as you can. It may seem like rocket science to you, but trust me. The only things you need to know are when you bank, when to go home, and know how much a losing day is going to cost you. However, don’t be disheartened by losses because, in forex trading, there is always the potential for a massive recovery. This is the simple concept behind achieving success in forex trading, and implementing it showed me great results.
Implementing the Lower Hanging Fruit Money Management Strategy on Your Own
There are so many traders that are bad at money management that it is almost comical, if not sad. That is a problem caused by perception and complicating things that should be kept simple. I am going to change all that by showing you the way in how you can implement the lower hanging fruit money management on your own strategy.
→ Main Objective
Over here, we will be discussing the main objective of the lower-hanging fruit money management strategy and the end result you should expect.
→ Define volatility and range profile
The market is always going to be fluctuating, but always keep your eyes on the prize, and don’t be scared by the volatility. You must set a range profile, which will mean that you must know how much a single-day loss is going to cost you.
→ Focus on the target
We already talked about keeping your eyes on the prize, and I am going to reaffirm that here. When you are focused on the gains you want to make, you will start seeing results that will take you towards the path of success.
Which software is best for forex
The best automated Forex trading software now accounts for the majority of orders executed in Forex: in the US alone, about 70% of daily transactions are made by some of the top recommended Forex software (which you’re about to learn more about).
Why is automated Forex trading software?
If you’ve done much Forex trading, you’ll know how exhausting trading can be, especially if something goes wrong. There are traders who dream of an intelligent partner, not exposed to emotions, logical, always looking for profitable trades, and who can execute those trades almost immediately. If you’re looking for all of that and more, look no further – these qualities also describe the best automated Forex trading software.
Table of Contents
Automatic Forex trading software can be used to trade a range of markets, not only Forex, including stocks, commodities, cryptocurrencies and more. The software simply analyses the market, and opens a trade so you don’t need to carry it out manually. In a nutshell, with automated trading software you can turn on your trading terminal, activate the program and then walk away while the software trades for you.
What is Automated Forex Trading Software (Algorithmic Trading Software)?
What is automated trading software? Traders who are searching for the best automated trading software may already understand that there are two ways to trade:
Automated trading software is obviously used in the second case.
Automated Forex Trading Software Definition
Some automatic software uses technical analysis to make algorithmic trading decisions, while others use economic news to place orders.
Advantages of Automated Forex Trading Software
One of the primary advantages of Forex auto trader software is the removal of emotional and psychological influences when trading. An automated trading system for Forex makes your trading decisions consistent and unemotional, exploiting parameters you have pre-defined, or the default setting you have previously installed.
Disadvantages of Automated Forex Trading Software
As with any tool, fully automated Forex trading software comes with disadvantages as well as benefits. Some of these include scams related to the sale of auto trading software, not understanding how to use auto trading software and the financial cost of using a professional coder.
So, what kind of automated forex trading software is there?
What is the best automated Forex trading software?
When it comes to using the best automated trading software, there are both free and paid auto trading options available.
How to do free automated trading?
Free auto trading simply means you are programming your own automated trading software, rather than buying one of the currency trading programs available on the markets. So, how do you make automated trading software?
To do this, you will need to:
If you don’t have the skills to code your own forex trading program, Admirals offers the MetaTrader Supreme Edition plugin for free to all live and demo account holders.
MetaTrader Supreme Edition is a tool for MetaTrader that has a range of exclusive indicators and Expert Advisors (or automated trading programs) that you can use to supercharge your trading.
For example, the free software trader EA Admiral Correlation Matrix calculates the correlations between several instruments and markets, giving you a clear picture of the correlated movements of the financial markets – and is 100% free.
Another example is the Admiral Donchian flag which has an alert to warn you of the breakout of a major price level. All free automatic Forex trading software is not intended to open positions – some only serve to send signals and alerts to the trader.
If you’re ready to get started, click the banner below to download MetaTrader Supreme Edition now in order to experiment with it:
Download the most powerful plugin suite for your favourite trading platform!
How to do paid automated trading?
There are several paid options for finding some of the best automated trading software.
Once you’ve created your trading strategy, you have three options.
1. Hire a professional programmer to build an EA, and then to test it on your trading platform to ensure its effectiveness.
If you really want the best automated Forex trading software and decide to have your Expert Advisor MT4 or MT5 develop by a professional, the bill will depend on the complexity of your strategy. As a general rule, the more complex the program is, the more it will cost you. And there is still no guarantee it will be the best automated trading software. The quality of your final EA will depend on the skill of the professional you hire, your trading strategy and several other variables.
2. Download a paid automatic trading software from the MetaTrader Market, accessible from the MetaTrader platform in the ‘Market’ window.
3. Find an automatic trading program on a third party website.
For options 2 and 3 to be their most effective, it’s important to take the time to learn about the Forex software and check the opinions of users and the strategy used. This will help increase your chances of finding one of the best automated trading software available.
The main risk lies in mastering the trading strategy of the algorithm. To use the best automatic Forex trading software correctly, you must understand the strategy it uses.
When you are buying from third-party sites, also be wary of unscrupulous sites that may be selling losing algorithms and using false advertising. If this is a concern for you, do not hesitate to buy a Forex algorithm from a serious developer who can explain the implemented strategy.
It’s now time to look at one of the top pieces on the list of the best automated forex trading software: MetaTrader. MetaTrader is one of the most popular trading platforms that allows traders to trade with expert advisors (EAs).
Automated trading in MetaTrader
While there is a range of trading platforms that accommodate automated Forex trading, the world’s most popular platform is MetaTrader. Both MetaTrader 4 and MetaTrader 5 offer traders access to a wide range of markets (thousands, with Admirals!) from a single platform, along with advanced charting functionality.
The platforms are also compatible with Expert Advisors (EAs), which allow you to carry out trades automatically. This is why some traders consider MT5 and MT4 automatic trading software.
Adding an expert advisor to your MetaTrader chart is very simple:
How to Optimise an MT4 or MT5 Expert Advisor
Source: Optimisation Parameters, Admirals MT4
Once these parameters are customised, all you have to do is press ‘Start’ to start the optimisation!
How to Analyse an MT4 or MT5 Optimisation Report
Once the optimisation is finished, you can go to the results in the ‘Optimisation Results’ tab. The different results can be sorted by:
You just have to choose the best results to find the parameters that best match the time period tested.
You also have an optimisation graph that looks like the following image:
Source: Chart Optimisation, MT4 Admirals
Beware, very often beginner traders who use a trading program tend to fall into over-optimisation and find themselves using an approach doomed to failure because the parameters of their automated Forex systems will be optimised too accurately for a defined period of time established in the past.
Thus, during the periods of future trading, the particular trader who employs such a system will see results very different than those obtained in the backtests, so it is not uncommon to see an automated strategy be largely successful in the past but losing thereafter!
Is optimisation really useful in automated Forex trading software?
If you only optimise a few parameters and your automatic system is dynamic and includes the price action reading, you will be more likely to avoid over-optimising your systematic approach.
On the other hand, it is useless, or even counterproductive, to seek to over-optimise an expert advisor. Finally, if you run several optimisations on your EA, consider changing the dates of the backtests, so that the algorithm is tested on different market context.
How to choose an Forex automated trading program
While our automated Forex trading systems of choice are the MT5 and MT4 auto trading software, you might want to consider your options on the market. To do this, it’s important to define your needs and do your research by reading automatic trading software reviews.
1. Define your needs
Since automated trading systems vary in terms of speed, performance, programmability and complexity, what is good for one trader might not be good for another. Some Forex traders will want a program that generates reports, or imposes stops, trailing stops and other market orders. Other traders, such as those who are less experienced, may want a simpler program with a set-and-forget feature.
With this in mind, the first step is defining your needs for the software.
At its most basic, the best algorithmic trading software should be able to perform the following tasks:
Assuming the programs you are considering can perform all of the above, when it comes to choosing between different automated forex trading systems, here are some more elements to consider:
2. Read the best automatic Forex trading software reviews
Some auto trading firms claim to have a very high percentage of winning trades. However, as the saying goes, if it sounds too good to be true, it probably is.
In fact, the main criticism made of those claiming to have the best automated trading software is that they are unscrupulous people selling losing algorithms. There are many trading scams on the internet, and it can be difficult for new traders to detect them, especially if you’ve never tried automatic trading.
Such advertising claims must be verified, and this is where automatic Forex trading reviews can be useful.
A quick Google search will bring up a range of websites that list brokers who offer auto trading support, as well as specific automatic trading software reviews.
On top of this, the best software publishers will provide authenticated trading history results to show the effectiveness of the programs they are offering. The golden rule is to understand that past performance is not a warranty of positive future results.
3. Consider the costs of the Forex trading software
While cost shouldn’t be your top concern, price competition does currently favour the consumer, so perhaps it’s a good idea to shop around for the best deal. Just be careful not to sacrifice quality for price. Prices for trading packages can range anywhere from hundreds of dollars to thousands.
4. Try auto trading before you buy
When you’re searching for the best automated trading software, you’ll find that some firms provide video content of software programs functioning in the market, purchasing, and selling currency pairs. If there are screenshots of account action with trade prices for buy and sell transactions, time of profit posting, and execution – then you should consider checking them out before committing to anything.
While testing what you believe may be the best automatic trading software, run the tutorial, or any other training function to see if it is appropriate and answers all of your questions. Additionally, you may have to call the support desk for answers to complex questions about programming, like the buy-sell criteria, and exploiting the system in general.
forex money management strategies
A well-defined Forex trading money management system is just as important for how to be a successful trader, as a good forex trading strategy.
What is Forex money management?
Forex money management is a set of processes that a forex trader will use to manage the money in their forex trading account.
The underlying principle of forex money management is to PRESERVE TRADING CAPITAL. That doesn’t mean never having losing trades in forex because that is impossible. Forex money management aims to minimise trading losses so that they are ‘manageable’. That means when a trade turns to a loss, it does not prevent the trader from winning other trades.
The idea of money management is closely linked to risk management because when trading, all the risks portend to your money. However, the definitions are slightly different. Risk management is about preparing for and managing all identifiable risks – that can include things as arbitrary as having a backup computer or internet connection. Whereas money management for forex traders relates entirely on how to use your money to grow your account balance without putting it at undue risk.
How do I stop losing money in forex?
This the question that forex money management will help to answer. Since we are all human and tend to have similar traits (good and bad) there are common mistakes to avoid in forex trading. Successful traders tend to think of trading as a business. The aim of your forex trading business is to make money, not lose it so steps should be taken to avoid losing it.
Can you lose all your money in forex? Yes, you can lose all your money in any investment where your funds are put at risk. So it is your job as an investor to minimise the chance that happens.
There are ways to fine tune a trading strategy to win more and lose less, but that is not normally the main reason people lose money in forex. The main reason tends to be having no specific money management rules to follow. So we will go through those rules now.
Top forex money management rules to follow
If you get these five money management rules right, your odds of forex trading success will improve greatly. These rules can be tailored to your own trading system but some version of these five forex money management rules should be written down and read before every single trade is placed.
1. Defining risk per trade using position sizing
The idea is that a trader should risk only a small percentage of their account on any one trade. Trading mentors often preach the ‘2% rule’ where a trader should risk 2% of their account on every trade.
For example, with a 100,000 CHF trading account, the trader would risk 2,000 CHF per trade.
Some traders will vary the size of each trade, depending on recent trading performance. For example, the anti-martingale money management method halves the size of the trade each time their is a trading loss and doubles it every time their is a gain.
A top trading strategy and sound risk management plan should help a trader make money over time, but you can never be sure what will happen in the next trade or even the next 10 trades. To mitigate the risk of the next trade being a loss, the forex trader should keep the trade size relatively small compared to the size of the trading account.
Then taking this same principal and extending it, the trader should also protect themselves against several losing trades in a row by making the amount risked so small that even ten losing trades in a row will be something they can quickly recover from.
2. Set a maximum account drawdown across all trades
What is a drawdown in forex? A drawdown is the difference in account value from the highest the account has been over a certain period and the account value after some losing trades. For example, if a trader has 10,000 CHF in their account, and then loses 500 CHF, that is a 5% drawdown. (500 is 5% of 10,000). The larger the drawdown, the harder it is to recover the account balance with winning trades.
Traders will set a max drawdown level that is acceptable according to their trading strategy backtesting. For example, if a trader tests their strategy over 50 trades and only ever experienced a 6% drawdown, then the trader might set 6 or 7% as the max drawdown. If when trading a live account, all the open trades put the account down by over 7%, the trader would have a money management rule to close some or all the trades to put the account back into good order.
3. Assign a risk: reward ratio to every trade
Is 2:1 risk reward the best? The rule of thumb taught in trading textbooks is that a trader should aim to have winning trades that are on average twice as big as the losing trades. With this risk: reward ratio, the trader need win only a third of their trades to breakeven.
In actual fact, the most important thing is to be consistent in the risk: reward ratios chosen. If a trader chose a risk: reward ratio of 1:1, then the trader must win a higher number of trades (at least 6 out 10) trades to be profitable. If the trader chooses a risk: reward ratio of 3:1, then they need to win fewer trades (1 in every 4 trades) to break even.
How to be a consistent forex trader… To achieve long-term profitable forex trading, a trader must have some idea what to expect from his or her trading strategy. Two important and complimentary components of that are the win: loss ratio and risk: reward ratio.
4. Use a stop loss and take profit order to plan trade exit
Using a stop losses locks in the maximum amount a trader can lose in any one trade, while using a take profit order locks in the maximum amount the trader can win. Using these forex order types the trader can make sure that he/she is not unexpectedly in a position that loses more money than planned.
Of course there are some disadvantages to using stop losses, the most frustrating of which is seeing a stop loss triggered, only for the trade turn around and hit the take profit level. But as annoying as that experience might be, it is worth keeping a stop loss to avoid those occasions when the price does not turn around quickly and leaves the account with an unmanageable loss.
5. Only trade with funds you can afford to lose
Last but not least; successful trading is only possible when the trader can make unemotional decisions about what do with a trading opportunity. If the trader ‘needs’ the trade to win because the money is required for other purposes, the trader is liable to make bad decisions and increase the odds of losing money. “Hope for the best and plan for the worse” by trading with funds that would not hurt your lifestyle if you lost them.
Can I trade forex with $100?
Let’s finish this forex trading presentation by answering this common question from newbie traders, particularly younger investors who have a small amount of money but would like to get started trading forex anyway.
Yes, it is possible to trade with $100 but it will be harder and a solid money management approach becomes even more important. In this instance, the trader should use ‘micro lots’ where each trade is worth around $1000 and each pip is worth around $0.10. Then the trader must have a maximum stop loss of 20 pips, worth $2 to keep to the 2% rule for positioning sizing. If you have more money to trade, it provides you with more room to manoeuvre in your trades and adds flexibility to your money management rules that increase the odds of being a profitable trader.