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samuel23

Managing Your Losses

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One of the cardinal rules of Forex trading is to keep your losses small. With small Forex trading losses, you can outlast those times the market moves against you, and be well positioned for when the trend turns around. The proven method to keeping your losses small is to set your maximum loss before you even open a Forex trading position. The maximum loss is the greatest amount of capital that you are comfortable losing on any one trade. With your maximum loss set as a small percentage of your Forex trading float, a string of losses won`t stop you from trading. Unlike the 95% of Forex traders out there who lose money because they haven`t applied good money management rules to their Forex trading system, you will be far down the road to success with this money management rule.

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samuel23 I am agree with you. Some traders lose money due to not using good money management system. There are number of rules and money management tips to avoid lose. We should follow them.

 

Thanks for liking this thread. This is very important fro Trader. We should never be greedy in Forex, we should simply wait for our time and we will benefit. Money management is vital in Forex Trading as we should always know how to control our money whether in a losing or winning Trade. We should always follow them ;)

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plan your trade...trade your plan...

all traders have different market views, thought processes, risk tolerance levels, investment size and market experience...

 

Nice quote. We should agree that each traders have different market views as very few of us trade the same way. However, we have to learn Forex quite similarly as we have do have some knowledge in common. :haha:

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Nice post Samuel.

One more advice to traders. Don't forget if you have a strategy stick to it! If you are loosing on your trades take a break, re-evaluate and come back with a plan, try to learn from your mistakes. And most important don't forget to follow money management rules- don't risk a high percentage of your equity and use low leverage. :doh:

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Do not over trade. Never trade more than 25% of your equity. If you found that your analysis is wrong or the market has turned cut your losses fast and switch, don't wait till your stop loss order to be executed. Never add to a lossing position; cut your losses fast.

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Setting proper stop losses are important to ensure that your losses are minimized. For traders that don’t want to sit in front of their computer every minute they have positions opened, stop losses are your best friend.

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what I did some time ago was never letting my margin to be more than 30% level.....by the time is was more, I just cutted the size of one specific trade and look for other opportunities....it was a nice way to keep you fresh and we all know that there is nothing better than a fresh start

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what I did some time ago was never letting my margin to be more than 30% level.....by the time is was more, I just cutted the size of one specific trade and look for other opportunities....it was a nice way to keep you fresh and we all know that there is nothing better than a fresh start

 

Experiments with strategy are always a good thing, especially if you can allow for yourself to lose a couple of bucks on micro or nano lot. You gonna faster come to what are you striving for in trading.

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I see that's an old thread however I am writing as managing the risks associated with investments is necessary and for that the most important thing is to invest to the extent that we can afford to loose. We can also diversify our portfolio in order to reduce the risk factor.

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