The reason for failure was because they risked too much and didn't apply good money management. Remember, the goal here is to keep our losses as small as possible while also making sure that we open a large enough position to capitalize on profits.With your money management rules in place, in your Forex trading system, you will always be able to do this.
In Forex Trading "keep your losses small". With small losses, you can outlast those times the market moves against you, and be well positioned for when the trend turns around. The proven method to keeping your losses small is to set your Stop loss before you even open a Forex trading position. The maximum Stop loss is the greatest amount of capital that you are comfortable losing on any one trade.
With your maximum loss set as a small percentage of your Forex trading float, a string of losses won't stop you from trading. 95% of Forex traders out there are lose their money because they haven't applied good money management rules to their Forex trading system, you will be far down the road to success with this money management rule.
There are so many people subconsciously willing to lose. By that, we mean they are not prepared, have not learned correct systems, money management and techniques.
Remember, the "Big Houses" make money in Forex. The commercials. They may be a minority as far as number of players, but they are by far the majority when it comes to making money.
Forex is a negative sun game, so if the big players are making money, who loses? The small speculator who is unprepared in the market, which by the publicised news etc, is about 90% of alltraders.
When you place a market order and leave it open - that is, enter a trade at the market price without instructions to close the order - you are in effect, gambling with the total value of your account. For this reason, you should consider adding stop loss instructions to all open positions.
For instance, if you are holding a longUSD/CHF position, you can include a stop loss instruction that automatically sells your long position if the rate falls to a certain level. In this way, you can limit the amount that you could lose on any given trade - even if you are unable to constantly monitor your account.
Take profit orders are similar in that they allow you to establish the rate at which you want open positions closed in order to lock in profits. Again, you simply need to identify the rate at which to take the profits, and the trading system closes the position without further intervention on your part.
In forex, there are two sides that must be taken, one that wins the trade and one that loses the trade. Then, you also have spread and commissions to keep the broker in a job. With incorrect management of a trade etc, you can lose whether you go long or short in a trade. How often have people seen a trade start to go in their direction (yay), then whipsaw back and take out their S/L. I have seen where a person could take two trades at one point in time and put in a S/L say 20 pips away in each direction. The trades gotta go one way, right. What if it whipsaws 25 pips in one direction (breakout) and then reversed for the actual move. Bang, you have lost trade both directions.
To win at Forex, you need to NOT think like everyone else. You need to develop a robust trading plan that will still be good in the bad times, you need very good money management techniques, and, most importantly, you need to be in control of your phyche/emotions. You should not know if a good trader is in a winning or losing position by their body language. They need to be emotionally stable no matter what and realise losses are part of the game and to be expected. They would know that their system is profitable overall, so losses are no big issue.
N.B If you have small amount please take forex signal for successful trade.
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