I survive with monthly trades | Episode 10: About Capital Management in Long-Term Trading [Relaxed Forex]

In previous installments, we explained the advantages of long-term trading, methods of analysis that incorporate economic indicators, and concrete trading timings; all of these rely on one foundation: money management. This time, we will consider what is most important in FX: money management.

Yudakawa FX Profile

Yudakawa FX. Individual investor. A "slow and steady" trader with an extremely small number of trades. Studying every day with the aim of achieving great success in FX. Holds accounts with various FX companies and is familiar with a wide range of services within the industry.

Official Blog:FX Slow-and-Steady Trader
Official Blog:FX Real Trade Dojo

Reasons Why Money Management Is Important

We have covered many topics up to now, but money management is overwhelmingly the most important. If you can manage your funds, you could say that other matters are not as important. Here, we will confirm the emphasis on money management by looking at trading examples.

First, let's look at the USD/JPY chart from 2006 to 2016 (Chart ①). The price movements from around 2006 to 2007 are outlined in a red box. In the red-boxed section, the trading method of selling the yen and holding foreign currencies long-term was being praised. It is the so-called swap-trade, aiming for both swap points and unrealized gains. I also rode that mood and held a large amount of USD/JPY.