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Article:
How To Make, And Keep, Money Trading Stocks by: Dave Wooding If you are serious about making and keeping money by trading stocks, then there are three things you need to do, and do well. Money management Orders Trading system Money management Money management comes first. Without a rock-solid method of managing your trading funds, you trading results will be only be fair at best. Money management is more than just knowing how much money you have tied up in a trade. It's a method of using the right portion of your trading account on any one trade relative to the perceived risk and reward. There are a few things to consider to managing a trade successfully: What is your account size? How profitable is your trading system? What is the initial amount at risk on a per share basis? What is the profit potential? Account size Your account size determines how long you stay in the trading game. If you are skillful, then you will not require a large account. On the other hand, even if you are a new trader, you can use a small account as long as you control your risk. Controlling the risk means never using more money then you need on any one trade. A very simple formula for stock market success is to risk less than 3% of your total account value on a single trade. If you have a $'10
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