Almost all forex trading literature focuses on finding better entries rather than developing sound exit and money-management strategies. This article shows how a money-management system that adjusts trade size based on market volatility can transform an unprofitable forex trading strategy into a profitable approach.

Given that we want to emphasize the role of money management, we will use a very basic trading approach — a simple moving average crossover system. Then we will apply different risk-control and money-management schemes to the system to see how they impact performance.