What is True Money Management (TMM)?
A strategy tells you when to enter the market and when to exit. Money management tells you what's the optimal position size and how much to risk.
I have a trading strategy and I am following the rules. Why do I need to know about TMM?
A trading strategy is not everything. You will fail with the greatest trading strategy in the world if you don't follow money management rules.
I often hear from the top traders that money management is very important. But I never realised what they are talking about.
It is not only important, it is a key of success. Traders who fail and blow up their accounts in a minute do not understand the importance of money management.
What about the exponential profits?
Trading champions are used to increase position size as their accounts grow. This way they earn a huge amount of money and get rich quick. When a novice trader tries to do this, he fails. You can't simply double lots to earn more. You need to know the exact rules and you should be prepared for situations when your account goes down.
I have my own trading style and I am doing well, I make $1000 monthly. Can I multiple my profits every month with TMM?
Why do you offer TMM as a free bonus?
We have found the cause why some of our students failed trading our strategy. They simply risked too much on one single trade or made inconsistent profits with deep drawdowns. We found it useful to explain money management with our strategy together.
I have a 99% winning system. I don't need TMM because I don't risk anything.
There is no perfect system! Trading is a probability game, not a game of being right. And that's why you have to control your risk.
I am investing in stocks. I think I don't need to manage my risk because stocks always go up in the long term.
And that's what the financial crisis is about.
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