Taking risk is essential
- Thread starter FX_Gigi
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Kinda makes you want to stay in bed.
On second thought....
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In Forex trading risk is rewarding also but we have to take risk after proper analysis so that we will be able to generate the reasonable profit from risky Forex market.
I've been testing a new strategy in forex called position sizing.
If you aren't sure it's basically risking 1-2% acct equity at a time but putting a lot of trades throughout the day. With a limit of (for example) of 30pips and a stop loss of 15, you can profit while having more losing trades than winning.
Lets say you made 10 trades in a day and 6 were losing trades.
6losing trades* 15 = 90pips lost
4 winning trades * 30 pips = 120 pips.
120pips gained - 90 pips lost= 30 pips gain
Therefore you made 30 pips while only getting 40% of your trades correctly, and only risking tiny amount.
I think this really minimizes the risk, especially taking out that emotional "I hope I'm right!" idea in the back of your mind every time you enter a trade. Although picking winner is important no one can expect to be right all the time.
As I said I am testing this idea. I picked it up from Dr. Van Tharp, hes got a few books on amazon that are pretty revolutionary in terms of the mentality and actions of the trader.
If anyone has any questions or criticisms go for it, but I think in terms of risk to reward this is a great concept.
If you aren't sure it's basically risking 1-2% acct equity at a time but putting a lot of trades throughout the day. With a limit of (for example) of 30pips and a stop loss of 15, you can profit while having more losing trades than winning.
Lets say you made 10 trades in a day and 6 were losing trades.
6losing trades* 15 = 90pips lost
4 winning trades * 30 pips = 120 pips.
120pips gained - 90 pips lost= 30 pips gain
Therefore you made 30 pips while only getting 40% of your trades correctly, and only risking tiny amount.
I think this really minimizes the risk, especially taking out that emotional "I hope I'm right!" idea in the back of your mind every time you enter a trade. Although picking winner is important no one can expect to be right all the time.
As I said I am testing this idea. I picked it up from Dr. Van Tharp, hes got a few books on amazon that are pretty revolutionary in terms of the mentality and actions of the trader.
If anyone has any questions or criticisms go for it, but I think in terms of risk to reward this is a great concept.
Yea of course risk management is very important for every trader because Forex market is although profitable but also it is risky too much so trader should developed their trading skills to get positive results.