http://www.capexforextrading.com/money-management Sometimes making profit in the Forex market is relied on more heavily by money management than by picking the currency pair to trade. This is backed-up and supported by the 2% rule which is used widely across the globe. Whilst it may sound small, the 2% rule is there to protect your investment and ensure you make the optimum profit. The rule applies to the risk part of your trade i.e. the stop loss distance you are using. In general terms, no matter how perfect the market scenario is you must never risk more than 2% of your total investment in a day or a trade. By setting this limit you do not leave yourself open to more losses during that day and simply wait for more opportunities tomorrow. If you succeed then your 2% becomes a bigger chunk of risk so this style of money management is always accumulative to your trading performance.