segunda-feira, 10 de agosto de 2009

Risks Involved in Trading Forex


A majority of the people who begin trading the Forex market have no idea of the risks involved. These risks are the reason EVERY broker and most all educators have the risk disclosure on the front page of their website. The risks are substantial. You are as close to throwing your money on the roulette wheel without even entering a casino. The main difference between the 5% of traders who make it in the forex market and the 95% who fail is the defined edge they give themselves with their strategy and the mental fortitude to follow that plan. In this case the trader is actually positioning themselves as the casino. We all know casinos make money.

Here are some ideas that can help you manage that risk and be 1 of those 5%. For starters a trader can have the best strategy there is however without sound money management this trader will surely loose everything in his account. Someone told me once that you can easily make money with solid money management alone. Of which is true for the most part. A good strategy helps too.

Then there is the emotional aspect. All markets move based on fear and greed. If a trader lets his emotions get the best of him he will never succeed in this business. This is the main reason why there is a major difference in trading demo vs. a live account. Its a lot easier to accept a huge loss with fake money. Loosing real hard earned cash is a different story entirely. One of the best ways to help yourself with these problems most traders have is learning methods that uses price action. Learning price action gives added confidence to most methods. To get some free tutorials on this subject you can follow the link at the bottom of this page.

Lastly one has to stick with their trading plan. A very successful Forex trader once told me. The only thing worse than following your plan and taking a loss is breaking your rules and making a profit. You will eventually do it again and again and probably sooner rather than later, wipe out your account. Set your rules and stick to them. Good luck. Lets bring that 5% up to 10%

Source: EzineArticles

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