| How to Minimize Forex Trading Losses |
 |
 |
 |
| Written by Gregor Anton |
| Sunday, 13 December 2009 19:29 |
|
by Forex Trader Gregor Anton - http://www.ForexCurrencyDayTrader.com
by Forex Trader Gregor Anton - http://www.ForexCurrencyDayTrader.com Last week I had some good trades and some bad. You will have losses. How you manage your money and minimize risk, and minimize losses will play a key role in becoming a successful Forex Trader. Rather than looking at how to get the most profit and make more pips, lets focus on minimizing your Forex Trading Losses: * No Trade = Good Trade - It's tempting to jump in and make a trade. Be patient. Create a demo account and practice. Only trade when you're 100% sure your trading system works. * Don't Babysit Your Trade - Follow your trading plan, system, and strategy. Know your entry and exit condition. Don't stress yourself out and watch your pips fluctuate or worse, go into negative red numbers. Follow your plan, set your stop losses and take profits. Walk away or do something else. Let your trading system and plan take care of the trade. * Don't Get Greedy - No matter how many pips and profit you make, you'll always want to make more. Sometimes less is more and that extra 10 pips can cost you the 200 you just made earlier. Greed is an emotion and you want to keep your cool and stay focused on practical trading. Emotional and impulse Trading is Gambling. * Save Your Emotions - This is a tough one for me, it's hard not to get frustrated when you've had a great week and in the matter of minutes you can see your profits disappear. Even with the best of trading plans, systems, and strategies. And in my experience, especially with Forex Robots, Signals, and Alerts. Let your profits run, cut your losses, and be sure to stick to your system and strategy. * Measure Profit in Pips - Focusing on pips rather than profit in dollars is far better. $'s make it emotional, pips keep it strategic. If you're not comfortable trading bigger lot sizes, don't. * The Trend is Your Fairweather Friend - And you thought it was your friend... It will change and according to some the Forex Market is Trending only 20% of the time. * Set Goals - Know exactly how many pips you are targeting. How many good trades you're going to stop at. How many bad trades you're going to take before walking away. Everyone has bad days and what I do is go for a walk, eat some Ritter Sport chocolate, grab a Mocha at Waves Coffee, or change my scenery in some way that gets me away from Forex. Bottom line, have a plan, follow it, make sure it's a Smart Plan. Specific, Measurable, Attainable, Realistic, and Timelined. * Set Conditions - When are you going to enter a trade? Exit? What is your Stop Loss and Take Profit? What are the market conditions? Market hours? Will you carry over? Trade around news times? * Economic Calendar - The Forex Market tends to become volatile around news times. This "noise" can really impact your trades. Some people stay away from news times. Others trade news times exclusively. Stay on top of Forex News by checking the Economic Calendar at least daily and figure out what kind of trader you are. * Manage Your Money - Only Risk 5% at most. Combined. If you have multiple trades, the sum should be 5% or less. Some people like 3%. Any more and you will have a tougher time rebuilding your portfolio after a bad trade. * Know Your Risk / Reward - How many pips are you willing to risk to make your pips? Are you going to risk 100 pips to make 10? Clearly you want to risk less than you are bound to make. * Take a Forex Trading Course - Education is key. Education can be expensive, the alternative is far more costly. That one tip or strategy you learn can be the distinction that'll change everything. There are many great trading courses out there, and there are many scams and hack-job courses too. Visit my site to find out who I swear by. * Take a Forex Trading Course - Education is key. Education can be expensive, the alternative is far more costly. Can you afford not to take a coruse? There are many great trading courses out there, and there are many scams and hack-job courses too. Visit my site to find out who I swear by. * Walking Away is the most important part of your day - We've all been there, a great trading day, week, or hour. x amount of successful trades, you've met your target and you're excited. Do yourself a favour. Walk away and end on a high note. The markets are quick to turn and in our over-excitement the simplest mistake can cost you all your profits. Just walk away and continue on another day! DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Want to find out more about Forex Day Trading, then visit Gregor Anton's site on how to Minimize Your Forex Trading Losses. |