Money management is controlling your risk through the use of protective stops, while balancing your potential for profit against your potential for loss. For example, good money management means you know your profit objective and the odds of being right or wrong, and controlling your risk with protective stops. You are better off with a trade where you might lose $1000 if you are wrong and make $500 if you are right, that would work eight times out of ten, than to take a trade where you would make $1000 if you are right and lose only $500 if you are wrong, but works only one time out of three.
If you are investing using your savings, it's even more important that you manage your money in your trading and in your personal expenses. Chances are high that you miss a good investing chance because of you are lack of capital.
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