Forex Trading Guide - Forex Prices Section

Welcome to Forex Trading Guide

Article

The Sneaky Way To Managing Losses In Your Forex Trading
David Jenyns

One of the cardinal rules of Forex trading is to keep your losses small. With small Forex trading losses, you can outlast those times the market moves against you, and be well positioned for when the trend turns around. The proven method to keeping your losses small is to set your maximum loss before you even open a Forex trading position. The maximum loss is the greatest amount of capital that you are comfortable losing on any one trade. With your maximum loss set as a small percentage of your Forex trading float, a string of losses won't stop you from trading. Unlike the 95% of Forex traders out there who lose money because they haven't applied good money management rules to their Forex trading system, you will be far down the road to success with this money management rule.

What happens if you don't set a maximum loss? Let's look at an example. If I had a Forex trading float of $1000, and I began trading with $100 a trade, it would be reasonable to experience three losses in a row. This would reduce my Forex trading capital to $700. What do you think those 95% of traders say at this time? They would reason, "Well, I've already had three losses in a row. So I'm really due for a win now."

They would decide they're going to bet $300 on the next trade because they think they have a higher chance of winning.

If that trader did bet $300 dollars on the next trade because they thought they were going to win, their capital could be reduced to $400 dollars. Their chances of making money now are very slim. They would need to make 150% on their next trade just to break even. If they had set their maximum loss, and stuck to that decision, they would not be in this position.

Here's a perfect illustration why most people lose money in the Forex trading market. Let's start out with another $1,000 float, and begin our Forex trading with $250. After only three losses in a row, we've lost $750, and our capital has been reduced to $250. Effectively, we must make 300% return on the next trade and that will allow us to break even.

In both of these cases, the reason for failure was because the trader risked too much, and didn't apply good money management. Remember, the goal here is to keep our losses as small as possible while also making sure that we open a large enough position to capitalize on profits. With your money management rules in place, in your Forex trading system, you will always be able to do this.
About the Author

Discover BIG profits from the market by downloading your FREE copy of David's new Ultimate Stock Trading Systems course. http://www.ultimate-trading-systems.com/forex.htm

Forex Prices News

forex prices

NEW YORK, March 12 (Reuters) - Global stocks edged higher on Friday, despite mixed signals on the U.S. economy, as strong euro- zone economic data dragged the U.S. dollar to a one-month low against the euro and risk aversion eased a bit. European ...

GLOBAL MARKETS-Global stocks, euro gain despite mixed ... - Forex Pros

Few rooms at five-star hotels are sold at rack rate. If you shop around you can often find online discounters quoting half the published rate. Use them. The best way to be sure you’re getting the best available deal is to consult a comparison site ...

How To Get Cheap Luxury Hotel Rooms - PRLog (free press release)

... from Citigroup, it cut price targets for Primary Health Care by 15% to $4.24 and Sonic Healthcare by 6.4% to $14.30 after applying lower multiples to unchanged earnings forecasts ... market, since 6am this morning, forex traders have traded the ...

Market Wrap - TheBull.com.au

People's misery is mounting amidst continuous increase of inflationary pressure on their household economy. Urban people, mostly the lower and fixed income groups, are suffering the most, as inflation is impacting more in urban areas (9.1 per cent in ...

BB tightens money supply to curb inflation: Tk 15000 cr ... - New Nation

Oil prices are on the rise again as the International Energy Agency is the latest forecaster to increase their expectations for China oil demand. Yet the IEA went far beyond just increasing demand expectations for China they said that the demand ...

Absolutely Astonishing - Inside Futures

FXstreet.com (Barcelona) - Dollar rally from 90.15 low ahead of retail sales has reached a fresh 2-weeks high at 91.05 and the Dollar has pulled back below 91.00, to 90.80 area after downbeat consumer sentiment figures. The pair remains trading above ...

Forex: USD/JPY eases below 91.00 after consumer ... - FXStreet.com

However, while they each may use wildly different techniques (I spoke with one very wealthy trader who confirmed his chart patterns by looking at planetary ... ve talked with great traders who can trade futures, forex and stocks at the same time.

5 Uncommon Rules of Wealthy Traders - Yahoo Finance

US business inventories lower than expected Forex: GBP/USD eased from 1.5170 high to 1.5130 area US Reuters/Michigan Consumer Sentiment Index disappoints FXstreet.com (Barcelona) -Pound's rally from 1.5025 session low has extended about 150 pips jump ...

Forex: GBP/USD eased from 1.5170 high to 1.5130 area - FXStreet.com

HONG KONG— LONDON AP) -- European stock markets and Wall Street futures rose Friday after better than expected figures for U.S. retail sales and eurozone industrial production helped ease concerns about the pace of economic recovery. The FTSE 100 ...

US retail sales give world stocks another lift - Boston Globe

The e-mails talk about plans to become a gold mining company with pictures and charts and diagrams. In principal it sounds great ... Just 3 months ago they wanted to change their name to a forex trading company, and three months before that they were ...