Would you like to know the secret of the best way to make money in Forex trading? Actually it is an open secret, it is common knowledge and you would have come across it in your education in Forex. The unfortunate thing is that as it is so simple and so plainly in sight that so many traders about 95% of them do not pay any heed to this secret. It is no surprise that 95% of traders fail and give up with in 6 months to 9 months of trading. The secret consists of 3 parts we will discuss these 3 parts below.
(1) Money Management
This is an often forgotten portion of a trader's education. Sadly for them as this is the only thing that is important in Forex trading. Money management comprises of discipline, the psychology of trading, greed suppression and profit and stop loss objectives. We could write a few books just on these subjects and the intelligent trader would be most pleased to read and learn more about money management. A good money management plan will enable you to protect your account in any market condition. It doesn't matter if the trade turns against you. This is because you have already planned for it and it does not matter. Thus when losses are no consequence to you, all that is left for you to do is to make profits! As simple as it may seem many traders choose to ignore money management plans and instead forge ahead and focus on a trading plan. This is trading suicide and if you go that way I assure you that you will lose your account within 6 months!
(2) Proper leverage and fully funded account
Another important part of the secret is proper leverage and a fully funded account. These 2 come hand in hand, Let's say that you do not fund your account fully but instead take a higher leverage to cover for the short fall. What happens is that you have exposed yourself to more risks than is prudent. If you have $10,000 go for a standard lot, if you have less then look to mini and micro lots. Rule of thumb is that your leverage should never exceed 1:100. If you can manage with 1:50 as you maximum leverage than that is best.
(3) Consistent growth
After you have covered money management and proper leverage the next thing you have to look out for is consistent growth, the way to riches in Forex is not trying to go for the big gains. Instead it is the slow steady profits that will enable you to sky rocket your profits. Look at how often the "gurus" tout fast gains. These so called experts most likely do not trade for a living at all. Compare that to the successful traders, these players are comfortable with 10 pips profits a day. I say again these players are totally happy with 10 pips a day. Just imagine if you are trading on a standard lot, 10 pips mean a dollar in profits (EUR/USD) per pip! You compound and you compound so that after a while the power of the compounding will supersede you actual earnings. With a standard account and 10 pips profits per day it will take you 3 years to make a million dollars. This has been proven time and time again by the author and countless of other profession traders.
Now that you have discovered the best way to make money in Forex trading I hope that you will always practice it and always learn more!
Dr. Joshua Geralds is a successful Investment Specialist with over twenty years experience increasing the income of people world wide. Visit http://www.pipsalot.com to learn how to make steady profits through safe trading and down load your FREE e-book "Money Management" for a limited time only! |
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