About Successful Trader

7 Jan 2010

If you want to be a successful trader you need to know 2 things. The first is money management. You've probably heard dozens of times, some of you may also have implemented some form of management in their Lotto EA or trading strategies and I believe it will, just as it is.

In order to perform a proper money management you have to understand what the concept behind the two words is. Eventually you realize yourself that the number of games you intend to trade in your next should not be chosen by a function, the only variable that is how much money you currently have on your account. This can be achieved only with a certain kind of strategies we need to identify and describe first.

The Meaning of Money Management.
A concept is only 2 words: Money and Management.
To manage means to handle. When we talk about Money Management we are talking about money. What we want is to have direct control (management) for the way in which we invest our capital.

Now, when we place an order we have control over its volume (lots) are not included in "money" is directly involved. If we are managing our money with the knowledge, we must be able to translate this book for our currency deposit in order to estimate the potential losses associated with the order.


Traders Success
We had heard many times that if we want to win in Forex must never risk more than 2%. Be ', which allows you to keep in mind and we will see that it works.
What you do is just to quantify it is much more than 2% of capital and avoid the risk more than the sum time next time you open a position ... Sounds stupidly easy ... so why not you done?

If you want to win you must be willing to lose
At a first glance can say: win = good, missing = bad.
Following this reasoning is driven to believe that loss prevention is a good starting point for the long journey to becoming a successful Trader.
These strategies do not use Stoploss and let the losses grow until the market is finally back in their favor and the position becomes profitable.EAs developed on those strategies usually show very good profits and not losses at all (win relationship is usually more than 95%). This behavior is still stable for a relatively short period and when the loss is unexpected and is great ... sometimes a single series of losses is sufficient to exhaust the account empty. And 'the typical mistake of beginners who try to code his first Grail. There.Systems like this was working well until the market has a strong tendency in one direction, but it becomes very dangerous when the trend disappears or changes of direction.
Ignoring the loss is certainly not the way to go if we want to see our capital growth in the long / term, medium term.
We want our strategies to be able to survive in the toughest conditions you can find out there so you want to avoid using a system that works only for short periods, introducing the risk of losing much of our capital, when the things go wrong.

There Is No Safe Trading without Stoploss
Before coming to describe how to implement Money Management in a practical way, it's worth remembering something that kills a large number of beginners and experienced traders Traders.Many without the use of SL is difficult. That the codes tend to think that an EA will take care of everything, after market close and open positions babysitter ready to quit when things go wrong. Nothing could be further from the truth when they place a heavy truth.In SL I do not know when the position will close when the market turns against you ... actually you can not be certain that it will be closed to all! How can we expect then to manage your money with the knowledge?
A strategy that does not use hard Stoploss CAN NOT 'implementation of sound money management!
Level of SL are always chosen by looking at the current market conditions, the so-called price action. Who uses a fixed SL (say, very common 20 or 50 pips) probably has a very narrow view of the market and trade in general. SL, in fact, must be large enough to avoid being swept away when the market retraces back at you ... but not too large or you would have a very limited performance compared to the risk that's on the market.
As a general rule:
you want to have a lot of support / resistance levels as possible between current prices and your SL
This will ensure that, if the market turns against you has the ability to slow down and get back in the right direction before hitting your SL.

I hope we can help you achieve your goals and understand a little 'more about Forex and how to trade in it.

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