One of the most important rules in Forex trading, is that you have to keep minimizing losses as much as possible. With smaller, even if more regular losses, you will be able to hold out longer and weather periods when the market is moving against you, giving you edge when the trend reverses. There are many techniques out there that teach about minimizing losses, but the only one that is although simple, really and practically proven, is setting up a maximum loss that you are willing to take, before entering a new trade.
Tag Archives: money management
If ever scientists invent pills against greed, those will most definitely become a must have for all Forex traders. Greed is one of the overwhelming reasons based on forex trading psychology that lead to losses. And if you couple that with some typical anxiety, such as fear of “entering the market”, closing a trade too early, or too late, losing your chance after a market spike, forgetting to trail your stops… There you go – we have us a typical real-money trader, and almost a recipe for disaster. Read More