The First Lesson I Learned As A Forex Trader by James Woolley
I started trading forex a few years ago now after having previously traded the FTSE 100 index and specific shares. Just as in these other markets there is one big lesson to be learned from trading forex and that is as follows.
If you want to become a successful forex trader you have to learn to cut your losses early and let your winning trades run for as long as possible.
When I first started out I used to make a lot of mistakes, but it was all part of the learning experience and I’ve come out of it a consistently profitable trader.
The biggest mistake I made initially was not having any stop losses at all, so any relatively small losses I incurred used to mount up and become big losses.
It’s very easy to believe that you will ultimately be proved right and stick with a trade, which is what I did quite a lot initially, but this can be very expensive and to be honest I quickly learned that’s it’s best just to accept you were wrong, take a small loss, and move on to the next trade.
On the opposite side, when it comes to winners you should either have a set target price and profit you are looking to achieve and stick to it, or ideally you should let your profits run as long as possible.
Any target profit should be higher than the stop loss you are setting. For example, if your stop loss is 10 points away from the entry price, then your limit price should be more than 10 otherwise you will need a fairly high win ratio of 50% just to break even.
Make sure you stick to this target as it is very easy to see a profit and grab it before the price has reached your target price.
Another approach is to close part of your trade at the same number of points away from the entry price as the stop loss so you guarantee yourself a profit, and let the remaining portion run as long as possible to squeeze out as much profit as you can. You can move your stop loss to break even so this remaining portion left open doesn’t turn into a loss, and the worst that can happen is you break even.
Alternatively you could just let your profits run as long as possible and use technical indicators to decide when a trade has run it’s course. For example, if a trade goes into profit, you could move the stop loss to break even straight away and let it run.
All of these methods are used to some extent by all profitable traders, but the key lesson is to make full use of stop losses. You want to make your trading pot grow over time, and the best way of doing this is by cutting your losses early and letting your winners run. This way you don’t need a high percentage of your trades to be winning ones, you just need a small percentage of winning trades which are allowed to accumulate.
About the Author
James Woolley has been trading currencies for around five years. He also runs a blog where he reveals all his best forex tips and strategies
Skyrim Walkthrough Part 9 – First Lessons
|
|
Wilton 902-240 48-Page Soft-Cover Cake-Decorating Guide, Course 1 $9.99 Contains 4 lessons for the cake decorating beginner from tips to use for flower making and piping, shells, leaves and framing…. |
|
|
Wilton 2116-105 Course 1 Student Kit $25.49 WILTON-Student Kit: Course I. This kit; along with the Course I Workbook (not included) will teach you the techniques you will need to become a Master of cake decorating. Kit includes: (7) stainless steel decorating tips(round: 3 & 12; star: 16 & 21; rose: 104; drop flower: 2D; and leaf: 67). (3) decorating bags: (2) reusable 10 inch and 1 disposable. (2) standard couplers. Flower nail #7. (… |
|
|
Kamrasi’s first Lesson in the Bible,.. – Mug – Standard Size $14.50 This mug is created using the finest dye sublimation techniques and creates a stunning dishwasher safe finish. Great as a gift, or for promotional items. Each of our mugs come individually boxed for protection in transit…. |
|
|
Tae-Bo Workout (SET OF 4: Basic, Instructional, Advanced, 8-minute Workout) [VHS] $24.94 Billed as the “future of fitness” and hawked by numerous celebrities, Billy Blanks’s Tae-Bo actually deserves much of the hype it’s receiving. A mixture of boxing punches and martial arts kicks, Tae-Bo is fun and easy. One of the best elements of this four-tape set is that the first tape (which is 40 minutes long), Tae-Bo: Instructional, lays out the movements you need to successfully complete a w… |
|
|
The Chronicles of Narnia – The Lion, the Witch and the Wardrobe [VHS] $4.84 In a misty London train station, four siblings await their journey to the country, a place to avoid the bombs of World War II, a place where one boy imagines nothing ever happens. As it turns out, the old professor’s spooky country house is ripe for exploration. Lucy, Edmund, Susan, and Peter’s adventures begin when the back wall of a fur-coat filled wardrobe opens up into the magical world of Nar… |
|
|
Cane Toads: An Unnatural History [VHS] $19.95 This odd documentary is for the audience that can’t get enough of off-center, real-life tales akin to those captured by Errol Morris (Gates of Heaven). In the 1930s Australian sugar-cane farmers imported the bufo marinus, or cane toad, from Hawaii to destroy the crop-damaging greyback beetle. In short, the descendents of the original 102 toads virtually took over half a continent. We hear from all… |
|
|
Liberty’s Kids: Complete Series $29.48 The producers of “Strawberry Shortcake” present this fun and educational 2002-03 PBS series that depicts some of the most significant events in American history as 30-minute animated adventures told through the eyes of three kids who work as reporters for Ben Franklin (voiced by Walter Cronkite). Standard; Soundtrack: English; featurettes; game; interviews; more. 40 episodes on 6 discs. 15 hrs…. |
|
|
New Amsterdam $1.99 … |
|
|
Ruby’s Piano Practice/Max’s Bath/Max’s Bedtime $1.99 … |
|
|
Spirals on Mocha Hoodie Towel — Hooded Towels for Baby and Kids Hoodie Towels are fantastic for the tiniest little newborns who love getting snuggled up in softness after a bath, and are equally fantastic for the grade-schooler after a shower. Beach or poolside, bath or shower, vacation or swimming lessons. Versitile uses, fun designs, quality construction!… |