Forex money management - simple advice to dramatically increase earnings
Monday, 11 August 2008
The simple money management advice exchange herewith will help improve earnings dramatically. Many currency traders are not big gains, simply because they do not understand the relationship between profits and volatility ...
Prices move in trends up or down, what is obvious from any table changes, but within the major trends that you constantly fluctuations or volatility. You must learn how to configure your stops to stay with the longer term trends and not be cut in advance.
Let's look at some basic mistakes most traders do in terms of risk control:
1. They try and trade moves randomly
Day traders and exchange scalpers try to do so but all volatility within a day is random and destined to lose and May and return a coin. They think the risk is low and it is, but the chances of getting arrested are enormous.
Understand this - there is no correlation between the frequency of your system Forex Trading trades and profits. In fact, the opposite is true, if you trade too often you take low odds trades and lose.
2. Trailing stops soon
Look at any table forex and you will see the major trends for the last weeks, months or years but the number of traders remain with them? Not much - why?
Because they are so obsessed with protecting their profits as it emerges, moving their judgement until more quickly and arrested.
What happens then?
Trade is the way they thought and batteries for up to $ 10000 or more and not!
It takes courage to accept gains and large stay a commercial activity, when opening equity hollow happen - but if your negotiating strategy forex said stay with the trend, do not be tempted to move up or ceases to benefit.
Here are some simple solutions and did not stop talking about initial investment is easy - the hardest part is what follows, and the mobile stops.
1. Remember the 80 - 20% rule
It merely indicates that 80% of your results come from 20% of your actions, it is applicable in all spheres of life and it is applicable in Forex Trading and means:
Cut your frequency!
I know that traders who trade May least a dozen times a year, do even three-digit profits, by being patient and just waiting for major operations high odds and you should.
2. Do not Diversify
You hear all about how it reduces the risk, but it reduces earnings.
If you have a high odds trade you think looks great, why weaken the profit potential with a marginal trade?
Stick with a trade and increase the amount of money you risk.
You hear a lot about a risk of 2% per trade, but if you do not you very much, the risk of 10% or more.
Risk is associated with reward and you have to take more calculated risks at the right time to make big profits.
This is not the rash is a successful speculator.
If you do not like risk and a challenge does not change the trade.
3. Trail stops outside the volatility random
Expect that trend to set in motion then your judgement trail behind the volatility random and give your Chamber of Commerce breathe.
If you stop near you never catch the big trends.
We like to make our judgments in line with key cards of support and 40 days MA.
Of course, we give a little back to the end, but you do not know when a trend is under way and to put an end to this method, you will get more than 50% of major trends and if you did that you make a lot of money.
A simple way to boost profits
It is therefore simple change money management advice and easy to do. If you integrate them into your strategy Forex Trading, you'll only trade high odds set ups and stay with the major trends.
Place a stop at the beginning of the operation is easy, how and where it is more difficult path.
Learn how to do it correctly the above and make things a critical element of your Forex Trading education and if you do, you'll enjoy a better anticipation of the market and take advantage of currency trading success.
Labels: forex
posted by Master @ 02:47,