{"id":277,"date":"2019-12-01T20:31:38","date_gmt":"2019-12-01T19:31:38","guid":{"rendered":"http:\/\/market-and-us.com\/blog\/?p=277"},"modified":"2019-12-01T20:31:38","modified_gmt":"2019-12-01T19:31:38","slug":"what-is-the-best-money-management","status":"publish","type":"post","link":"https:\/\/market-and-us.com\/blog\/what-is-the-best-money-management-277\/","title":{"rendered":"What is the best money management?"},"content":{"rendered":"\n

It is important to pick the best trading setups and choose the entry and stop loss wisely. But a very important part for trading success is the best money management<\/strong>.<\/p>\n\n\n\n

Before writing about the money management we will look at the market:<\/p>\n\n\n\n

The little signal for a healthy reversal<\/h2>\n\n\n\n
\"\"
SPY<\/strong> (daily candles, source: thinkorswim)<\/figcaption><\/figure>\n\n\n\n

The SPY<\/strong> made its way up more than +4%<\/strong> since it broke out of the range.<\/p>\n\n\n\n

And after three green candles a red one with the close below the previous low<\/strong> appeared on Friday. That’s a bearish signal. But because the weekly candle is a bullish one after the previous weekly candle in red, it’s only a weak impulse<\/strong> for the bears.
In addition to that SPY is overbought<\/strong> (stochastic above 80).<\/p>\n\n\n\n

The 20 EMA reached the horizontal support at $310<\/strong>. Therefore this level could be a target for a possible move downwards.<\/p>\n\n\n\n

But I will wait for Monday’s candle<\/strong> before drawing any conclusion. If we’ll get a lower close than Friday’s low it is more likely to reach $310<\/strong>. If not it is more likely to move sideways a little bit or reaching higher prices.<\/p>\n\n\n\n

Good money management?<\/h2>\n\n\n\n

This week I bought KWEB<\/strong> for long term on Monday. But because US ETFs are not possible for trading in Europe I chose the London Stock Exchange (LSE)<\/strong> for my order.
I am not confident<\/strong> because the mirrored ETF doesn’t move as bullish as the US version in my opinion. I will watch it some more days but if there won’t be a change in price action to put my doubts aside I will close it with a small profit (I wrote about when I am using mirrored stocks for long term investments in this comment reply<\/a>).<\/p>\n\n\n\n

\"\"
ITRI<\/strong> (daily candles, source: thinkorswim)
– now with price axis, entry, stop and target (thanks, Filipe and Paul!) –<\/em><\/figcaption><\/figure>\n\n\n\n

And one of my newest positions reached its target: ITRI<\/strong>.<\/p>\n\n\n\n

For ITRI<\/strong> I did not told you the whole truth. \ud83d\ude09 I decided to trade two approaches<\/strong> taking half of the risk for each of them: One with a wide stop loss<\/strong> and therefore a long way to the target at 2R and one with a close stop loss<\/strong> including a short way to 2R.<\/p><\/blockquote>\n\n\n\n

And it’s obvious that the wide stop loss is serving more room<\/strong> for the price action to the downside and an advantage for the big picture of a chart whereas the close stop loss has the only advantage in the low distance to the target<\/strong> and being helpful for fast and short impulses.<\/p>\n\n\n\n

I am trying both for at least 3-5 months now. It’s more work every day for every trade but this will create statistics for both approaches and after some months I can decide which one fits best to my trading style.
Most important: I will stick to this system – without any improvisations!<\/em><\/strong><\/p>\n\n\n\n

That’s what I meant with the title: There are many variations for the money management<\/strong> and my two approaches are little more detailed as I can explain here. I just want to motivate you to think about the money management and if you find two systems you like and you can’t decide which one to trade … just take both<\/strong>, but consistent!<\/p>\n\n\n\n

\n\n\n\n

Thanks for reading<\/span>, thanks for the two new subscriptions<\/span> to the newsletter, best profits<\/span> for you in the following week and a wonderful winter and Christmas time!<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

It is important to pick the best trading setups and choose the entry and stop loss wisely. But a very important part for trading success is the best money management. Before writing about the money management we will look at the market: The little signal for a healthy reversal The SPY made its way up […]<\/p>\n","protected":false},"author":1,"featured_media":290,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"yasr_overall_rating":0,"yasr_post_is_review":"","yasr_auto_insert_disabled":"","yasr_review_type":""},"categories":[5],"tags":[66,69,60,71,9,67,29,70,30,34],"yoast_head":"\nWhat is the best money management? - The Market and Us<\/title>\n<meta name=\"description\" content=\"In this weekly summary with market analysis and trade discussions I show you different approaches for money management I am using.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/market-and-us.com\/blog\/what-is-the-best-money-management-277\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is the best money management? 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