W ITH a great knowledge about how to read your forex chart, you are now ready to trade. However, I would like to take this opportunity to talk about something known as business management. Without proper commercial management, it will never be profitable as it always will be stopped at the end.
This is exactly what I do every time I'm running and hopefully put it into practice.
The most important thing in business administration never set your stop loss to put at greater risk and reduce their target profit. This will take you to negotiate constantly with a ratio of reward low risk.
For example: you enter a short trade and see that the price is slowly moving towards your stop loss of 30 pips and you decide to change the stop loss 50 pips hoping that the market will eventually move in your favor.
Most of the time, discover that the price still stop at 50 points, which means it is now operating with more losses. As a trader, we must accept the fact that we are in the wrong every time the price moves to stop and not change the stop-loss to incur further losses at the end of business.
This is a very common mistake made by new entrants because they can not accept any loss in their operations. So I'll share with you something that I usually do in my trading.
Whenever the price moves against my position, I will stick to my stop loss and if the price finally stops me, I will accept and seek another transaction.
If the price moves in my favor, slowly change my stop loss to breakeven and eventually wait for the price to reach my goal. In this case, even when the price is reversed to stop me, I'm not losing a single nugget and this is how I protect my capital.
Creating wealth comes from how speculators are handled.
Using an approach to money management, will be a speculator two bits, earning some money
here you are missing something there, but never achieved great score. Ring Bronze commodity marketing will always be
out of reach as you move from one trade to another.
As a trader, it is very important to understand the importance of protecting your capital. For a professional trader, protect your capital is more important than winning a trade. If you plan to become a profitable trader one day, you must understand and apply this good business management skills
to trading.
Another approach to this system of money management I want to show is a more conservative / secure fit that can be added at the expense of some potential reward.
Instead of opening a purchase order, it opens two in place, both with the same stop loss and
Input prices. The only difference is that divides the total amount of money you want to risk in exchange
between two orders. So if you want to bet $ 200 in exchange establishes the two operations at risk $ 100
each with the size of your lot.
In one of the operations set its target for a risk / reward ratio of 1: 1.
In the other operation, set the target as its original price target for the operation.
When the operation Objective 1: 1 is hit, you collect $ 100. This $ 100 now covers the risk in its second
trade is still open. This makes the second transaction is a "free trade" because if the second operation was stopped, not lose money. The first operation was + $ 100, the second operation stopped
: $ 100. The only way you can lose money with this setting if the operation is 1: 1 does not reach the target and
Both operations are stopped.
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