I bet you are eager to learn the secrets to be a profitable trader
If you are struggling to make some extra bucks through trading then you have landed at the right place. You see some years ago I was just like you may be right now. I was at my ends wit as I could not put the pieces together.
In my early days of trading I did a common mistake that most new traders tend to be a prey of, which was ignoring my Money management rules. This one mistake was the cause of my failure in the currency market.
Forex over the past few years has attracted a lot of new comers to this market. This major interest in the foreign exchange market has been driven by the massive amount of money someone can potentially make trading the Fx market. This desire to make money within a click of a button has been a major trigger to get so many people interested in forex. However, due to the fact that most new comers are blind folded by the amount of money to be made, they forget the one crucial thing every professional traders follow. The money management rule.
Money management is in other words the back bone of your trading. Having well thought rules and sticking to them will help you stay in the FX arena for longer. Bear in mind that trading is to some extent a game of probability, a reason why to have a good money management rule in place.
Below are some of the critical rules you should abide too in order to survive the currency market.
* Only risk 2% of your total account on any single day. If your system gives you 5 different trades, make sure that the 2% is distributed over the 5 trades respectively.
* Your trading size should be less than 1/10th of your account size.
* Always use a Stop Loss when trading. Remember to place your SL at a decent swing low/high so that you do not get thrown out of the market too early by some stop-hunters.
* Take partial profit each time you reach a certain level of major resistance/support and bring your Stop Loss to Break-Even.
As you may see those are very simple rules, but due to the simplicity of this technique, it tends to be over-looked. Applying those rules to your trading may dramatically change the way you think and trade the market.
The table below will help you have a clearer idea of lots sizes:
1 Lot = 100.000 Units of a currency. Pip value = 10 Dollar
0.1 Lot = 10.000 Units of a currency. Pip value = 1 Dollar
0.01 Lot = 1.000 Units of a currency. Pip value = 0.1 Dollar
Taking into consideration that you are risking only 2% of your total trading account, your next step will be to pick the right lot size to suit your risk level.
For more information on how to become a super successful Forex trader, read my full review of Top Dog Trading and Forex Mentor and obtain your copy of FREE Forex Video Courses.
