The Sneaky Way To Managing Losses In Your Forex Trading
Managing losses in forex trading or money management is a crucial skill. In fact, when you're making gains in your currenct trading, you still need risk management rules too! So in this article David explains what many currency traders do with their position sizing when they have a losing trade in their trading, that is what not to do. And also he covers what is a better way to go [Editor's note]
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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