Friday, June 24, 2011

FOREX — Dealing With Your Losses

Keep your losses as small as possible it is one of the most important part of forex trading. With small Forex trading losses, you can take more than the time when the market goes against you, and good if the trend will be placed on hold. A proven ability to absorb losses is small, to determine the maximum loss before you even open a Forex trading position.

The maximum loss is the largest amount of capital that is easily lost on a trade. With your maximum loss as a small percentage of the cost Forex trading, a number of losses will not stop the trading for some time. This is in contrast to 95% of forex traders lose money because they started to have money management rules to use their forex trading system, you will do with this money management rule.

To use an example, if I had a Forex trading float of $ 1000 and began trading with $ 100 per trade, would not experience a lot of sense to me three defeats in a row. That would be my Forex trading capital will be reduced by $ 400th It was then decided to go the next bet $ 200 because they have a better chance to win, after losing three times to think.

If the trader has $ 100, a race that will cover the next show, he would win, their capital could be reduced to $ 250 dollars. The ability to earn money are now virtually nil, because I have to make 150% on the next show, need only break even. If the maximum loss was determined, and stopped, it would not be in this position.In this case, the reason for the failure, because the dealer is probably too much money and do not apply good money management to the game. Remember, the goal here is to keep our losses as small as possible, while ensuring that capitalize on a sufficiently large profits and minimize losses to open. With your money management rules in force in your forex trading system, you will always be able to do so.

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