Forex market is very volatile. Expect the currency to moves 100pips or more within a day. If your cut lost is too tight - 10pips, expect your cut lost to be hit most of the time before your target price arrived. However, day trader or intra-day trader cut loss is around 20pips to 30pips. Short term or swing trader has a cut loss around 100pips. Long term trader cut loss is very huge and I'll not focus long term.
Once you have demo trading account for six months to a year successfully, you can starts to trade with real money.
Don't under capitalised especially if you are very new in this forex market.Have at least a $10,000 trading account. Get a feel of live trading! Trust me you heart will pump up real fast once you see you account shoot up or down before your very eyes during hot market hours!
Start with a mini account before going into standard account. Initially, you will need lots of trading experience.
If you have a $1000 forex trading account and you risk 10% you have about 10 times to trades. Not advisable!
If you have a $10,000 forex trading account and you risk 10% you have about 100 time to trades.Minimum requirement.
I know all the courses out there said you need only around $200 to trade a mini due to leverage. Well, there's more to that such as minimum margin requirement, your account could be wipe out due to volatility, your confidence would be in shaken etc.
When you have consistent success for 6months to a year, you can increase forex trading account to $50,000 follow by $100,000.
Yes, I know all asipring new forex traders want to make a killing in this forex market. Many courses give great promises of getting quick and big money with their forex trading system, techiques etc. Please remember their super fine print of stating about risk in forex trading etc.
The rules for the risk reward ratio must be a minimum of 1:1. I say minimum because your habit of success must be 1:1.5. In other words, for every dollar you risk, you must plan to make at least 1.5 times the return. When you risk $100, your projected gain must consistently be $150.
Make luck happens to you. Cheers ...
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1 comment:
Money management is most important part of Forex trading and you explain it very well in this blog post. Thanks for sharing
KayaFX experience
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