What Is danger in Money Management?

    Did you know that most of people lose money while they invested in FOREX? Yet, that is true.  Now, why is that?

       Human nature and psychology have much to do with it. Fear and greed – two very strong emotional feelings make people do things they otherwise wouldn't, if their head would be clear. To keep investors mind on track professionals try to teach people using PAMM plans and stick to them. One of the most important chapters of a PAMM investment plan should be the money and risk management chapter. Since most of   investors know nothing about this topic, they constantly lose money in FOREX.


     You have probably heard about not to invest all your money in one PAMM account. What about that you should always know your worst possible outcome on every of  investment? OK, let’s see what does that means in practice.

     I usually ask investors  the following question: “How many bad investments it takes to clear out your portfolio?“. What do you think? Only one! One single bad investment is enough to be kicked out of the market, forever. So you should better know  danger of investments  and do something for it.


     As a solution, to avoid huge portfolio draw down, experts in money management have invented so called  PAMM Money Management rule. Never heard of it before? The basic idea is quite simple – you should never risk more than 10-20% on any single investment  you do. What is the benefit of respecting this PAMM  money management strategy? And  you have the opportunity to invest the sum of $3000 it  mean for investment will be $300 and it is 10%. Moreover, even $300 is do not need to spend all. To get started of investment  you will spend a very small amount $20-50  for  you  to understand of investment, which you now have a very vague idea, but you want to do investment .
What Is danger in Money Management? Danger is that Money management  is closely linked with  Risk management and one can not be without the other. Not enough to know how much you can invest, but need to know how you can follow any responses to reduce risks. You need to understand how much you can  invest, where and  when to invest.
When a person is planning to preserve their investment, he is repelled by the analysis of income and expenses. People who have a proactive stance,   try and increase income (loans, extra income and so on). Money-management concern only questions that relate to the preservation and increase income . 

  For save  of investment you need use money  management of investments. For save money, follow these guidelines: 

Avoid investments that were not planned,

always looking for alternative of investment

accounting budget  of investment, typically 10-20% 

Set profit that expect to get from each investment.