The science of money management for trading is the art of managing one’s stock capital, while applying risk management to the ensemble of assets. It is an essential element in the training of a trader, which determines investment strategies. Money management for financial professionals consists of choosing a security portfolio and diversifying, after having studied the risks for each asset. This occurs primarily through the implementation of a stop-loss based on technical analysis of a stock, which is a tool for a trader, explained in further detail by one of our professors in a recent publication.
Money management is directly related to technical analysis, portfolio management and even the psychology of trading, as this form of management is specific to traders, who may take excessive risks in making ill-informed investment decisions. Within the scope of this discipline, the practical course in the Trading Room becomes important as it allows the student to develop trading habits and behaviors that are then discussed in class by experienced professionals. The theoretical course is based on a reference work written by a member of our pedagogic team.