Our research and surveying has confirmed that too many new and green foreign exchange traders simply do not understand how to manage risk in each trade – and all too often, the result is the same : they wipe out their accounts. here’s what we find is occurring. Currency exchange has grown in renown so fast that many traders who are new to forex trading have just waded into the waters, opened an account and have started putting on trades without any real thought or planning to a way to approach trading. It should be obvious that the issue with this thinking is virtually no experience of how to approach trading foreign currencies and the heavy risks to capital that it poses. You do not apply the same emotional control, the same trading principles or rules, you may take greater risks with the demo account and play too safe with the live account ( often to your own loss ). Reverse your thinking : learn first, trade second. In fact, everywhere, the need to reverse folk’s mindsets about forex is what’s required. Learn the right way to trade first, and THEN take that information to the market and trade with it. as part of that learn first eventuality – the NUMBER ONE part to trading foreign exchange that new, green or unsuccessful traders should learn is the simple way to MANAGE RISK 1st in every single trade. http://www.yourforexangle.com/y/?i=1042601&u=4&l=f2 By learning to manage risk FIRST, traders will find their trading transformed as they can approach foreign exchange trading with an entirely different attitude, a plan for erasing risk and a solid set of rules by which to trade. Mitch Horn has been writing articles online for a few years now. Not only does this author specialize in diet, fitness and weight loss, you can also check out his latest website on FX Online Trading which reviews and gives the best tips Forex Day Trading System..
I had an opportunity to chat with Bill Poulos today and posed that question to him. Did you know what he said? ‘most experienced currency exchange traders wait too long to move stops to protect their positions and frequently watch their profits disappear.’ And that wasn’t all – he went on to elucidate a simple concept, similar to Gambler’s Ruin that permeates the forex trading world. essentially, once a trader sees profit in a trade begin evaporating they get solely targeted on getting back the lost profits. They forget to see the need to give protection to the profits that they still have in the trade. The result? A reversal continues, the once-profitable trade becomes a bad trade and the trader’s frustration mounts. I’ve seen this myself and it’s the easiest trap to fall into, as you convince yourself the Euro dollar just hit that intra-day high and it can get back up there! Except – it does not and it continues to drag back till your 20 or thirty pip gain turns into a twenty or thirty pip loss. that could be a pretty dreadful example – but have you had that happen to you? What do you do? Bill had an answer for that, too! he said most traders don’t know what the available profit potential is for any single trading event – that is, they don’t set profit targets which allow them to take what the market gives them and then exit the trade in multiple steps. And, without a method that protects capital first and manages profits second, there isn’t any way the average currency exchange trader can survive in the foreign Forex markets. to position yourself properly, traders MUST have a multi-part strategy – one that teaches them the easy way to identify the BEST available trades, clearly sets out a profit target, helps manage the taking of those profits and from the outset, teaches traders how to protect their precious capital! He calls this handling risk first, taking profits second – and it’s actually revolutionary thinking. Watch the 1st part of his new, free video series on this right here : http://www.yourforexangle.com/y/?i=1042601&u=4&l=f2 Mitch Horn has been writing articles online for a few years now. Not only does this author specialize in diet, fitness and weight loss, you can also check out his latest website on FX Online Trading which reviews and gives the best tips Forex Day Trading System..