The purpose of this information about money management is to show how you can control your risk exposure. Many traders would perform better if they followed some simple rules. A trader who never makes mistakes is a fantasy. Successful traders often have many losses behind them, and have experienced both bull and bear markets. It can take a trader years to gain experience and knowledge of the market, particular stocks, and what affects the market, and the insight as to when it is better to not open a position. Additionally the trader needs to control the emotional part of trading, euphoria when things are going well, and panic when things are faring poorly. All traders experience the same thing and like the poker player it can be profitable to know in advance how to behave in different scenarios and keeping a cool head. The emotional part is only learnt by training and experience, but there are theories to learn and to use in order to be a successful trader.

Funding
The size of your trading capital is entirely dependent on your personal economy. Never trade with more money than you can afford to lose. Never use money that you could possibly need next month in order to pay your rent and bills. Never risk your home in order to trade. Separate your trading capital and your everyday money in different accounts.

Spread Risks
Don't put all the eggs in one basket. Trade only so that you risk a small percentage of your capital in each trade. The upside of the trade should be about twice as large as the downside. When trading Binary Trading the position is usually only open for a day, but longer expiry times exist. CFDs and Spread Trading offer longer expiry times, but remember that Impeo's products are designed for short-term trading.

Knowledge
You do not need an economics degree in order to be a successful trader, but with knowledge about factors that affect equities, commodities, interest rates, and other markets, is a prerequisite for achieving success as a trader. There often exits a connection between different factors that affect prices and levels in the market. If for instance interest rates rise, the stock market has a tendency to fall, as traders may find it more profitable to invest their capital in virtually risk-free bonds instead. An increase in rates could as such produce a pressure to sell on the market and prices fall.

In order to procure information there exist a great variety of literature on analytical methods such as fundamental analysis and technical analysis. You can also find use in books on trading, economics, and psychology.

Other useful information can be found in business magazines, financial press, and daily papers. Read a variety of papers and follow the news, domestic and international. The Internet is a good source of information, just be sure to check sources of the information published.

Trends
A stock market, individual stock, commodity, or other financial instrument, may rise or fall for a longer period of time. Do not trade against the trend in the belief that it will soon turn around, but act only when you have sure signs that the trend has finally reversed. Stay in your positions if the market is trending in your preferred direction, if you are not sure where the trend is going be on the alert to close your positions at a moments notice.

If you are uncertain as whether to take a profit or stay with a position it may be good to halve your position and as such secure half the profits. In this way you will minimize your anxiety in the case the market moves against you as you at least have secured half the profit. Should the trend continue to be profitable for you then you will still have half the position open to continue to generate profits for you.

Do not marry the stocks
It is very common to that traders hold on to stocks that are not performing well. This is not a winning strategy.

Cut your losses short
If you open a position and the market does not develop as you have anticipated then you should not wait for the market to change, but you should rather take a small loss instead of waiting and taking a great loss. Why would you be smarter or know better than the market?

Stop loss
A good strategy is to use stop losses. When you trade using Spread Trading or CFDs with Impeo you have access to traditional stop losses that prevent your losses from growing too large. For a premium Impeo also offers guaranteed stop losses that are certain to close your losing trades at exactly the price you have set. If your position is profitable be active and adjust your stop loss as the market moves. In this way you secure profits while also increasing the likelihood of more profits whilst lowering the risk.

Discipline
Having good disciplince is one of the hardest things for a trading. Most traders admit that the times when they have lost most money are the times when they have not adhered to their own designed set of trading rules. The tough part is when emotions enter the scene. It is not easy to be cool and calculating when greed or panic enters your mind.