As soon as you decide to work on the currency market you should realize that being a successful trader requires an effective system of controlling your funds. Steady and smooth money management ensures safe margin trading. The balance between average profit and loss should be kept strictly.  Only in this case playing turns into working on the market. The main criteria of money management on the market are given below.

1. Each trader should have reserve money for unforeseen situations. The amount should not be less than half of the deposited funds.

2. In order to avoid loss of the entire deposit it is not recommended to allocate more than 10-1537f all traded funds to one market.

3. The volume of a single deal should not exceed 547f all operated funds. In this case an unprofitable deal will not cause a substantial money loss.

4. All traders seek to get as much profit as possible. But possible losses should be also taken into consideration. If you decided to place your funds to the markets of one group, their total guarantee amount should not exceed 20-25

5. A trader should determine the degree of portfolio diversification.

Risk diversification is a means of funds protection. A trader should keep the balance between concentration and diversification. It is possible to distribute funds safely by opening several positions simultaneously on 4-6 or less markets of various groups.

6. Stop loss orders.

When being away you should set stop orders so as to prevent losses or for additional profit, like in the case of stop profit.

7. Correlation of probable profit and loss.

An open position during an unpreferred market trend should motivate the trader to balance possible profit and loss. As a rule the ratio equals 3:1. Otherwise it is recommended to refrain from opening the position.

8. Trading with several positions.

When entering the market with several open positions a trader should divide them into trend and trading ones.

Trend positions are accompanied by quite liberal stop orders, which allows a trader to keep the positions even amid consolidation and price adjustment.

Trading positions are limited by strict stop orders and usually meant for short-term trading.

9. Position opening:

a) the position should be opened only if an indicator gives more than 1 signal for it.

b) before opening the position a trader should define:

the entry price;

the price of closing a profitable position;

the price of closing an unprofitable position;

the time limit for the open position.

c) the position should be opened against the trend for a short period with great care.

d) the same actions should be undertaken during a flat.

10. Maintaining positions and closing them partly before the estimated time.

a) positions should be supported only in case the analysis proves previous conclusions.

b) a trader should close a part of the positions when:

the losses exceed the expected ones;

the price reaches the value expected for the profit;

c) a trader should wait if:

the losses are below the expected level;

the price is still;

the price did not reach the level required for the profit.

12. Closing positions

Positions should be closed if:

the estimated time has run out;

the desired profit is attained;

the expected loss is attained;

the maximum profit is attained.

A trader should keep in mind that a wisely developed diversification strategy is essential for successful and profitable trading.