Money Management is a simple set of rules that tell you when to enter, how much to risk and when to exit a trade. Without these rules you are TRADING BLIND!
Professional traders have been doing it for years. They know that you can't always be right. Professionals have developed trading rules as part of an overall Trading Plan.
The sole purpose of money management is to minimize your losses and maximize your winners. This is accomplished by using a variety of simple rules that will show you where to enter, how much to risk, how to manage the trade and how to exit the trade.
How can you expect to win against professionals with years of experience, resources and solid money management rules; when you can't even decide when and how you will enter a stock?
Once you have rules in place it becomes much easier to trade. Why? Because you simply have to follow the rules and not worry about unknown factors. Company news or analysts on TV can easily influence your trading decisions when you don't have a plan. The reason for this is that you are looking for validation and guidance in your trading.
With solid rules in place you let the market decide who is right and wrong not some talking head on the television. You just need the good judgment to follow the rules you have laid out in your plan.
