Advanced Risk Management
HOW TO LOSE ALL OF YOUR MONEY TRADING FOREX! Traders with some experience may have heard of the term, but I guarantee you that a lot of traders don’t understand it.
That opening line may have scared you, but don’t worry, because the point of this is to learn how to reduce the risk of losing your capital.
Correlations between currencies can be challenging to manage, but it’s not impossible. As long as you have a basic understanding of what correlation is and how it occurs between two or more pairs, strap in your seat belts for some excellent techniques!
Often as a Forex trader, the first thing you want to do is just make money without really looking at the reasons why you may not be making money, or rather the reasons for losing trades.
Now, don’t get me wrong it is vital to focus your attention on having great winners, but it is equally important to focus on the small losses…
It’s not what you think.
This particular topic is a bit taboo in Forex trading for some and a real reality for others. But how can that be? If you’re new to Forex then allow me to disabuse you of the notion that everyone experiences the market the same way.
It ain’t the size of the fight in the trade, it’s the size of the trade in the fight.
Position Size. Some traders have labeled position size or position sizing a crucial part of profitability using any strategy. You could have the world’s best strategy but if you bet too big, it wouldn’t matter because at some point you would incur a string of losses that wipe you out so you’ve got to find the sweet spot.
Not for the faint-hearted
A stop-loss that trails behind price. A trailing stop has been the answer to many traders’ prayers, yet it is so downplayed and overlooked you would swear it was an indicator. Well, it isn’t… This is how you actually use a trailing stop. I’ll be the first one to say I had no idea you could trail your stop behind price until about 6 months after I started learning how to trade, some of you literally just found out
To Scale In or Not to Scale In… That is The Question…
MONEY. MONEY. MONEY. That’s the game we play. Money Management is a crucial part of a trading system. Often this part of a system is over-looked and ignored but Money Management alone can be the pivot of a trader’s career from unprofitable to profitable. I don’t blame you! Money Management can be Unsexy, the veggies on your plate if you will and unfortunately for some… MOM KNOWS BEST.