Money Management 101

09/24/2015 6:00 am EST

Focus: STRATEGIES

Kevin Davey, of KJ Trading Systems, explains that while good money management won't turn a terrible system into a great system, bad money management can surely turn a great system into a potentially disastrous one and he offers a way for a trader to put this principle into practice whether he creates his own system or follows an advisor.

You can create or follow the best system in the world, but if you use improper money management, you'll never see success. Good money management won't turn a terrible system into a great system, but bad money management can turn a great system into a terrible system.

To successfully use this tip: If you create your own system, make sure you include money management principles. For example, if you risk 25% of your equity on every trade, you'll be out of money soon, regardless of your system. If you follow an advisor, make sure he or she is using money management. Proof of that is usually found in a verified track record.

By Kevin Davey of KJ Trading Systems

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