There is a lot of talk about managing money between financial traders.
Almost every book ever written on financial speculation goes into this aspect of financial transactions, yet very few people seem to understand when it comes to real industrial practicalities of implementation of the trade.
Managing money for most people is about using a certain percentage of the pot the investment or compromising x amount of dollars for a trade and placing a stop loss on the market, restricts the protection from damage, while using a target profit is usually 2 to 3 times the risk, i.e. about this.
Although using a stop loss is certainly the first step to protect your investment, but there is certainly more trade management by using a hypothetical profit target.
I like to call it management position, this is an integral pat managing your money and protect your investment, since you are on the market. Think of it like driving, do not use only brake but directs also help protect you from a developing hazard.
Once your position is on, your job is to manage your trade well, having a constant eye on the market scan for a sudden change in investor sentiment. This will not only protect your investment and get out of the market, before your stop loss is hit, but may also help you losing your position at a profit.
The financial speculation, location management is what makes the difference between winners and losers. The use of stop loss and profit target is only the beginning of an interesting story ...
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