Managing your trading funds well is the key to winning at swing trading. If a trader does not manage their trading funds correctly, they more often than not begin to increase the size of their trades after they get a few winning trades under their belt. The main goal of this is to increase the speed and rate at which they make a profit. However, this style of trading thanks to poor money management usually results in traders blowing up their trading accounts and losing more money than they make.

Good money management is based upon the following main points: Detach yourself emotionally from the money. Never trade more than you are comfortable with. Never risk more than you stand to win. First, you need to remove any kind of emotional attachment to the money you use for trading. It is best to use money for swing trading that you know you can live without. This isn’t about failure or the worry of failure. It is about being smart. Trading with money that was set aside for other more important needs will only add stress to your trades. Do you really need to make trading any more difficult by worrying about how you will feed your family if you lose next week’s paycheck? I hope not. Second, always start your first trades using very small amounts. There is no need to rush. The markets will be around for years to come and you should be in no rush.

Just how small should you start trading? The answer to this depends on you, what do you feel comfortable with. During trading, you should be focused on trading and not on how much money you may win or lose. To avoid having this happen, only trade with amounts that you feel ok with. This may be only a few cents at the beginning, but that isn’t important. The important thing is that you are in control of yourself, your emotions and your trading.