I just came across an interesting topic about why most traders fail. It turns out it's not about market analysis or timing entries and exits, but about money management, which in English is called Money Management or MM.

If you think about it, MM is just as important as having a good trading strategy because it helps us know how much to invest per trade and how much loss we can tolerate before it affects our account. So, what happens if we trade without a money management plan? The result is that we often overtrade, opening large positions after winning, and when losing, we lose heavily.

What I’ve understood from trading for a while is that MM has three main components: setting an acceptable risk level, determining the appropriate position size and leverage, and using Stop Loss systematically. If we have these in place, the risk remains controlled.

Good money management isn’t hard to understand, but it requires practice and patience because we must accept that each trade can lose. When losing, we need to accept the reality and learn from it. We shouldn’t chase after losing trades or try to recover the lost money.

Another important thing is to plan every trade before entering a position. Write down where to enter, where to exit, where to place the Stop Loss, and what the profit target is. This method helps eliminate emotions from decision-making.

As for leverage, it’s like a double-edged sword. If used wisely, it can amplify profits; if misused, it can also amplify losses. Therefore, it’s essential to choose leverage that fits our capital.

I believe that MM is something that should not be overlooked. No matter how skilled you are at trading, poor money management can still make long-term success difficult because most problems stem from not having a clear money management plan, not from incorrect market analysis.