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Advice for Managing Your Forex Trades

A common issue was discovered when we spoke with some Forex traders about one of the problems they faced while their trades were in progress, and that was that they often saw their winning trades become losing trades.

As we have discussed previously, if you are not managing your forex trades from beginning to end, this will happen to you – and most likely it will occur repeatedly.

This is the underlying basis of the dilemma: Trades are approached with a stop loss initially.

The majority of traders don’t even have a ‘target’ as they attempt to obtain ALL their profit in one shot – many traders will ’screengaze’ once their trade starts to become profitable – they pay attention only on how much they have gained or are gaining at the moment. They fail to make plans to exit the trade, staying too long in the trade and often standing by while their profits go up in smoke when the market turns against them. And to make matters worse, they remain in the trade EVEN LONGER in an attempt to recoup those lost profits. In Forex trading, this proposition is a loser.

They lose the view of the trade’s purpose due to GREED.

Why is a trade made? Very simply, it is minimization of risk and maximization of gain.

Maximizing gain does not mean the you will necessarily exit a trade at the exact peak, but it does mean that while the trade is ongoing, you have a set of rules that you follow to exit for profit – and that is not where YOU believe it is!

We will return to that thought later. To minimize risk, you must do more than merely set an initial stop loss – you MUST manage your stop losses throughout the entire trade.

Protection of capital comes first, when a trade is entered by Forex traders, and profit is thought of second. Once the position begins to trend up, it is possible to adopt the correct action to secure both capital and profit margin.

It is ASSUMED that there will be a loss on each trade by most Forex traders that are successful. They conduct this “mind game” to ensure that they remain focused on their risk method. Upon a trade starting to go the right direction (to their astonishment), the first things they perform is to see themselves get into a break-even trade condition and then utilize continuous stop loss management to maximize their winnings on the trade.

Profit is second, risk is thought of first.

View this video to see how to do it: http://pit.wpengine.com/private-forex-training





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