Wake up to your internal body to attract money.
Showing posts with label 3. Money Management. Show all posts
Showing posts with label 3. Money Management. Show all posts
Monday, July 13, 2009
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Monday, November 17, 2008
Money Management Part 2
What is over trade? Risk reward ratio? Well, I'll explain further ...
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.
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 ...
Tuesday, October 28, 2008
Money Management part 1
Fundamental and Technical Analysis give you higher chances of more winning trade in the forex market. Money management is very important too in forex trading. Remember to protect your money and the risk reward ratio involve during every trade.
Protecting yourself as you trade is called a protective stop-loss order in the market at the same time as you execute a trade. You need to know how much you are willing to lose ahead of time before you enter a trade. This needs to be a subconscious habit.If the trade does not work out according to your plan, you will be able to emotionally and financially survive without that loss affecting your life and financial security. Events that move over 500pips in a directions don't happen everyday, but a surprised fundamental announcements happen all the time.
Scientists say it only takes three repetitions to form a habit. If you trade two or three times with a mental protective stop-loss order or even without one, you will start to feel that you have harnessed the market and figured out how it moves. You will start to feel happy, confident and proud of your new trading breakthrough. A costly mistake most traders make is that they enter the market and instead of placing an actual protective stop-loss order with the computer, they used 'mental' stop loss confidently.
Congratulation, you have just formed a new self-destructive habit. The forex market can liquidate you in less than five hours. Every trade involves risk. It is not surprise to know that in the forex market a move of 500pips is possible should any unforeseen news happen. If you are just started out with a $5000 account and just bought 1 standard lot your account will be wipe out in your very own eyes.
Protecting yourself as you trade is called a protective stop-loss order in the market at the same time as you execute a trade. You need to know how much you are willing to lose ahead of time before you enter a trade. This needs to be a subconscious habit.If the trade does not work out according to your plan, you will be able to emotionally and financially survive without that loss affecting your life and financial security. Events that move over 500pips in a directions don't happen everyday, but a surprised fundamental announcements happen all the time.
Scientists say it only takes three repetitions to form a habit. If you trade two or three times with a mental protective stop-loss order or even without one, you will start to feel that you have harnessed the market and figured out how it moves. You will start to feel happy, confident and proud of your new trading breakthrough. A costly mistake most traders make is that they enter the market and instead of placing an actual protective stop-loss order with the computer, they used 'mental' stop loss confidently.
Congratulation, you have just formed a new self-destructive habit. The forex market can liquidate you in less than five hours. Every trade involves risk. It is not surprise to know that in the forex market a move of 500pips is possible should any unforeseen news happen. If you are just started out with a $5000 account and just bought 1 standard lot your account will be wipe out in your very own eyes.
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