Top 3 Money Management Hacks No One Will Tell You About

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Top 3 Money Management Hacks No One Will Tell You About

Top 3 Money Management Hacks No One Will Tell You About

 

Money management decides the trader’s profitability, and that is why every successful trader is a good money manager first. Money management is the most crucial aspect of trading, yet it is unnoticed by many traders, and they all end up blowing their accounts at the end due to this.

In today’s lesson, I will share with you the top 3 money management hacks that can surely help you manage your money while trading.

Top 3 Money Management Hacks

1.) Be Accountable For Your Trades

I often say that trading is a very personal thing. It’s between you and your trading screen. The trading style which is suitable for you may not be suitable for everyone else.

You get a lot of freedom in this profession as no one is instructing you to do a particular thing or there are no deadlines for the tasks. This freedom can work in your favor as well as against you. If there is no one to hold you accountable, then you don’t have to give any answers to anyone, and you may act based on your emotions.

On the other hand, if there is someone who holds you accountable for your trades, it can be your mother, father, wife, etc., then there is someone you need to answer to. This accountability will stop you from making bad decisions, and eventually, you will end up managing your money quite carefully.  

 

2) Know The Value of Real Money

The hack I am going to tell you may sound odd, but it works for me, and I am sure it will work for you. For explaining this hack, let’s take an example.

Consider a case where you withdraw Rs.10000/- from your ATM, but unfortunately, it gets stolen while walking on the road. Imagine how you would feel when your money gets stolen. Now consider a second case, where you are sitting in front of your trading desk, you find a trading opportunity. You enter in the trade, and your stop loss gets triggered, and you end up making Rs.10000/- loss.

I am sure that out of these two cases, you would be much more frustrated and saddened in case 1 compared to case 2. The reason behind this is straightforward. In both of the cases, you lost the same amount of money but, in the first case, you lost ‘real’ money, which had a more significant impact on your mind, whereas, in the second case, the money was in digital format.

One of the big reasons traders fail to manage their money in the market is that everything is digital nowadays, including your money. When you lose money on a trade, you don’t give money physically to anyone else; it all happens digitally. So, it is like an ‘out of sight, out of mind’ where people fail to understand the actual value of money and consider money just in terms of numbers.

So, in order to know the real value of money, I would recommend you withdraw some trading profits every month to feel the physical presence of your trading profits. It will help you understand the actual value of money, and whenever you trade, it will keep reminding you how important it is to manage the risk of your capital instead of focusing on profits.

3) Take Frequent Breaks From Trading

 In recent years, something that has worked wonderfully for me is ‘taking brakes’. Every trader goes through different cycles, and it is important to take a break when you get tired. If you feel frustrated or tired day after day, it indicates that you should take a break from trading, no matter how well you are performing. If you trade with the frustrated mind, there is a danger for your accounts equity curve.

So, taking frequent breaks works the best, especially when you are on a losing streak. One more important thing is, during breaks, don’t watch markets. Often, when they are on a break, many traders keep watching markets and keep thinking about the missed opportunities, which is not good.

So, these are the top 3 hacks that have helped me immensely throughout my trading career, and I am sure that these hacks will help you a lot in your trading journey as well.

If you have any suggestions regarding this article, please let me know in the comment section; I will be more than happy to hear them!

If you want to know more about Risk Management & Intraday Trading Strategies you can refer to our previous blog on

Importance Of Risk Management In Trading and 10 Best Intraday Trading Strategies.

 

Open a Demat Account using our link to get support from us – https://bit.ly/3gyhIWN and send your ID to [email protected]

Happy learning!

 

Booming Bulls Academy

10 Comments

    1. Give us a call on this number for course details +91-8130245100
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    1. Give us a call on this number for course details +91-8130245100
      9 AM to 9 PM: Working Hours

  1. Nice hacks and very important aspect of trading that is our capital we should have value of our hard money no suggestions very nice article

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