Practical Advice – Risk Management – Forex For Beginners

November 15, 2011 by  
Filed under Uncategorized

Article by Michael John

The man is such that he preferred to learn on its own, and not on other’s mistakes. In a certain distrust of other people’s experience lies the germ of progress, because once we try something new, you can make a discovery. Nevertheless, some councils have crystallized from the experience of other traders, I think it is appropriate to offer the esteemed reader.

1 – Place Stop Loss and Take Profit orders immediately after the opening position to reduce the influence of psychological factors.

2 – When placing Stop Loss and Take Profit orders ratio of profit / loss not less than 2 / 1. Stop Loss should be no closer than 50 pips from the entry point.

3 – Based on the preceding paragraphs, we find that the Take Profit orders should be no closer than 100 pips from the entry point. This will minimize the broker’s factor, i.e. attempts to reduce your profit by slippage (shear quotes at the close position). The value of slippage becomes irrelevant factor for you, and you can trade with any broker.

4 – When a Stop Loss 50 pips and Take Profit orders over 100 pips positions will be open an average of about two working days. If the price does not go in your direction, then she will go against you. Why should you wait for the execution stop? After two days close your positions if no Stop Loss, Take Profit or were not performed. If at this moment the position is profitable, then you can just move Stop Loss order level at the break even level.

5 – Keep a pledge not more than 10% deposit.

6 – Move the Stop Loss order only to reduce losses / increase profits. But this should not be carried away, because You run the risk that some small rollback remove your Stop Loss(too close to move up to the current price), and the price make a trip to your Take Profit order is without you.

7 – Do not close the positions before the moment of execution of Stop Loss or Take Profit orders (except when the position more than two working days in the market).

8 – Do not open new positions in addition to the loss.

9 – Before you start trading, sleep well. Do not enter the market is tired, no matter how tempting the situation may seem.

10 – Never trade on the last money. Otherwise, the sense of the error rates will hang over you and your actions that will make trade unbearable, will push to false steps and, ultimately, lead to defeat.

11 – “The market is no place nor obstinacy nor impulsiveness. The trader must always keep the situation under control. Even if you are often lucky, you should not become too arrogant. Otherwise, a resounding success followed by no less resounding failure.

12 – Do not let the will of emotions. Emotions – the worst enemy of the trader.

Stay cool. Getting in a bad trading period, it is better to take short vacations, clear my head of doubt and return to the market calm, cool and collected. Mental state – the most influential factor in the creation of investment income.

How easy to make the big money on forex every month? -> free forex tips,free forex indicator,free forex tutorial

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!