Tuesday, June 24, 2025
  • About us
  • Economic Calendar
  • Price Predictions
  • Coins Alerts
  • Crypto Portfolio Tracker
  • Exclusively from Our Partners
Cryptheory
  • Cryptocurrency List
  • Cryptocurrency
    • Cryptocurrency Exchanges
      • Top exchanges for trading Bitcoin derivatives
      • How to buy bitcoin without KYC
      • How to Trade Bitcoin – best platforms
      • Best platforms to buy Bitcoin by debit or credit card
      • Platforms for Grid Trading
      • BYDFi: Review and Guide
      • BingX: Review and Guide
      • Kraken: Review and Guide
      • Bybit: Review and Guide
      • Bitpanda: Review and Guide
      • Phemex: Review and Guide
      • Huobi: Quick Guide
      • Binance: Review and Guide
        • Binance Futures Guide
    • Bitcoin
    • Tether
    • XRP
    • Dogecoin
    • Avalanche
    • Stellar
    • The Open Network
  • crypto news
  • Crypto Exchanges Info
  • Analysis
  • Attractions
No Result
View All Result
  • Cryptocurrency List
  • Cryptocurrency
    • Cryptocurrency Exchanges
      • Top exchanges for trading Bitcoin derivatives
      • How to buy bitcoin without KYC
      • How to Trade Bitcoin – best platforms
      • Best platforms to buy Bitcoin by debit or credit card
      • Platforms for Grid Trading
      • BYDFi: Review and Guide
      • BingX: Review and Guide
      • Kraken: Review and Guide
      • Bybit: Review and Guide
      • Bitpanda: Review and Guide
      • Phemex: Review and Guide
      • Huobi: Quick Guide
      • Binance: Review and Guide
        • Binance Futures Guide
    • Bitcoin
    • Tether
    • XRP
    • Dogecoin
    • Avalanche
    • Stellar
    • The Open Network
  • crypto news
  • Crypto Exchanges Info
  • Analysis
  • Attractions
No Result
View All Result
Cryptheory
No Result
View All Result

Forex Trading Money Management – The Secret To Growing Your Returns Exponentially

by cryptheory
September 22, 2022
in Guest Post
Reading Time: 2 mins read

[ad_1]

Introduction

Did you know that you can lose huge sums of money trading Forex, even if you have a profitable Forex trading system? Contrary to what most Forex traders believe, a profitable Forex trading system is not the be all and end all of successfully trading Forex. The secret to keeping your trading account safe and growing your returns exponentially at the same time is the little known practice of Forex trading money management.

What Is Forex Trading Money Management?

Forex trading money management is basically how much you should risk on each trade, and there are many different money management strategies out there. One popular example that you will hear about often is the 2% rule, which states that you should not risk more than 2% of your trading capital on any one trade. Most people get confused with this definition because they confuse margin with risk per trade, so I’ll explain it in a different way: if you’re using the 2% rule, then you should size your positions in such a way that you will not lose more than 2% of your capital in any given trade. For example, if your stop is 10 pips away, and 2% of your capital is $200, then you should only take 2 contracts (2 Contracts x $10 per pip x 10 pips = $200 risk per trade)

The Limitations Of Traditional Forex Trading Money Management

Most people follow the 2% rule religiously without knowing why they are meant to do it. I personally believe in knowing why I’m doing something before I do it, so researched this thoroughly. Turns out that if you want to minimize the risk of blowing your trading account while maximizing your trading profits in the long run, then you’ll want to keep your risk per trade to between 2-4 % of your trading capital. Depending on your own tolerance for risk, you can actually go up to 3% or even 4% to ramp up your profits even further, without greatly increasing your risks.

The Secret Exponential Money Management Method

The 2-4% Forex trading money management model is a type of geometric money management technique, and is the most efficient way of growing your capital when trading Forex. Traditionally, people apply Forex trading money management using a fixed contract sizes, which is good for small accounts but not very efficient. The reason why the 2-4% rule is so powerful is because it allows you to apply the power of compounding to your trading. As you gain profits, you reinvest it over and over again, which creates an exponential growth rate in your trading account. I’m sure you’ll agree that when it comes to your trading profits, an exponential increase is far better than a linear increase.

The Power Of The 2-4% Rule

There are two ways of applying the 2-4% rule. One is to update your position sizes at the end of regular time intervals, and the other is to update your position sizes at specific profit/loss milestones. Regardless of which method you apply, it’s clear that the 2-4% rule is powerful because it creates the fastest and safest growth of your trading account. Obviously, you will need a profitable Forex trading system to apply this Forex trading money management strategy successfully. Once you have these two components in place, then there’s really nothing stopping you from creating a consistent Forex passive income that grows and grows over time!

Thad B

  • Author
  • Recent Posts
cryptheory
cryptheory
Core team behind Cryptheory Labs and website Cryptheory.org.
cryptheory
Latest posts by cryptheory (see all)
  • Why Online Advertisers Should Request Website Traffic Data from Google Analytics Instead of Using SEO Tools Like MOZ or Ahrefs? - March 24, 2025
  • North Carolina’s Bold Move: State Bill Proposes Investing 10% of Public Funds in Bitcoin - March 22, 2025
  • Justin Sun Stakes $100 Million in Ethereum on Lido – What Does It Mean for the Market? - March 19, 2025
Previous Post

BTC Buying Guide – Easy 3-Step Guide to Buying Your First BTC

Next Post

A Primer on Commodity Trading

Related Posts

Personal Traits in Trading
Guest Post

Personal Traits in Trading

September 5, 2023
Top 10 Leading Countries in AI Research and Technology [current_date format=Y]
Guest Post

The strategic approach to AI in the enterprise

September 4, 2023
The development of Bitcoin mining technology
Cryptheory News

The development of Bitcoin mining technology

March 28, 2025
Why the smart cities of tomorrow are relying on blockchain tools
AC mania

Why the smart cities of tomorrow are relying on blockchain tools

September 2, 2023
What are the advantages of causal analysis
Guest Post

What are the advantages of causal analysis

September 2, 2023
Crypto Fraud: How To Protect Yourself From Crypto Scams
Guest Post

Crypto Fraud: How To Protect Yourself From Crypto Scams

June 30, 2023
Title: Bit by Bit: Navigating the Labyrinth of Crypto currency Scams
Guest Post

Bit by Bit: Navigating the Labyrinth of Crypto currency Scams

June 29, 2023
Games Is Important Part in Our Life
Guest Post

Games Is Important Part in Our Life

March 28, 2025
Philippine Oil Deregulation – A Policy Research Analysis
Guest Post

Philippine Oil Deregulation – A Policy Research Analysis

March 28, 2025
Please login to join discussion
Track all markets on TradingView
Score: 0
Game Over

Popular

Solana On-Chain Frenzy: New Addresses, Spikes, and Degens Running Wild

Solana On-Chain Frenzy: New Addresses, Spikes, and Degens Running Wild

June 12, 2025
The Hottest Female Characters in PC Games: A Deep Dive into Digital Desirability

The Hottest Female Characters in PC Games: A Deep Dive into Digital Desirability

June 5, 2025
Ethereum Price Analysis & Trading Tips: Triangle Squeeze and RSI Shenanigans – WTF Happens Next?

Ethereum Price Analysis & Trading Tips: Triangle Squeeze and RSI Shenanigans – WTF Happens Next?

June 18, 2025
Altseason Is Coming: Time to Saddle Up, Degens

Altseason Is Coming: Time to Saddle Up, Degens

June 20, 2025
Analysis & Trading Tips June 10, 2025: Dogecoin Is Barking Again

Analysis & Trading Tips June 10, 2025: Dogecoin Is Barking Again

June 10, 2025
SOL's Big F***ing Breakout: Why Solana's About to Send You to the Moon

SOL’s Big F***ing Breakout: Why Solana’s About to Send You to the Moon

June 10, 2025
TRON’s On-Chain Reality Check: Growth, Greed, and Why TRX Ain’t Dead Yet

TRON’s On-Chain Reality Check: Growth, Greed, and Why TRX Ain’t Dead Yet

June 19, 2025
2025 Déjà Vu? Why This Bitcoin Dump Might Just Be Your 2020 Moment All Over Again

2025 Déjà Vu? Why This Bitcoin Dump Might Just Be Your 2020 Moment All Over Again

June 23, 2025
To Everyone Selling Their Crypto: Take a Breath, Quit Panicking, and Read This Like a Pro

To Everyone Selling Their Crypto: Take a Breath, Quit Panicking, and Read This Like a Pro

June 23, 2025
Staking: Is it Just a Fancy Ponzi Scheme? Let's Get Real.

Staking: Is it Just a Fancy Ponzi Scheme? Let’s Get Real.

June 11, 2025

⭐ What Type of Crypto Investor Are You? (v2)

1. How do you DYOR (Do Your Own Research)?

2. Your first reaction to a 10x pump?

3. What’s your opinion on memecoins?

4. Where do you stake your crypto?

5. What’s your exit strategy?

6. How do you pick your next investment?

7. Favorite kind of airdrop?

8. What’s your approach to NFTs?

9. How do you store your crypto?

10. What's your long-term crypto goal?

Crypto News

Bitcoin

Ethereum

Altcoins

Cryptocurrency

Platforms for Copy Trading

Platforms for Grid Trading

Glossary of trading and crypto terms

Crypto Portfolio Tracker

 

Cryptheory Labs Projects

Guest Post for Free

On our website, you can share your opinions and insights. This feature is reserved for non-promotional articles. We are already working on a system for donations and rewarding every author.

This website is here for those of you who want to be at the forefront of innovation and new technologies like Bitcoin. But first, we need to tackle the challenges and survive in the unforgiving world of crypto assets. THIS IS CRYPTHEORY!

Follow Us

  • Terms Of Use
  • Privacy Policy
  • About us
  • Contact us

© 2024 Cryptheory - F**k the forex, we want gains!

Shiba Inu loading
No Result
View All Result
  • Cryptocurrency List
  • Cryptocurrency
    • Cryptocurrency Exchanges
      • Top exchanges for trading Bitcoin derivatives
      • How to buy bitcoin without KYC
      • How to Trade Bitcoin – best platforms
      • Best platforms to buy Bitcoin by debit or credit card
      • Platforms for Grid Trading
      • BYDFi: Review and Guide
      • BingX: Review and Guide
      • Kraken: Review and Guide
      • Bybit: Review and Guide
      • Bitpanda: Review and Guide
      • Phemex: Review and Guide
      • Huobi: Quick Guide
      • Binance: Review and Guide
    • Bitcoin
    • Tether
    • XRP
    • Dogecoin
    • Avalanche
    • Stellar
    • The Open Network
  • crypto news
  • Crypto Exchanges Info
  • Analysis
  • Attractions

© 2024 Cryptheory - F**k the forex, we want gains!

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.